Electric Power Generation & Distribution

The 2,441 Electric power generation and distribution companies in the US produce and deliver electricity to residential customers, commercial businesses, and industrial operations. The industry consists of publicly-owned utilities, electric co-operatives, investor-owned utilities, and power marketers. Operations are either fully or partially regulated, depending on the state they operate in.

Changes in Environmental Laws and Regulations

Environmental laws and regulations are changing constantly and can have large impacts on electric utilities.

Natural Gas Holds Largest Share of Generation

Low natural gas prices, growing electricity demand, and a shifting regulatory environment are expected to keep natural gas the leading source of electricity generation for the foreseeable future.

Jul 24, 2026 - Large Utilities Pledge to Shield Consumers from Higher Bills Related to AI Deployment

• Nearly 200 utilities, data center developers, and government leaders have backed President Donald Trump's pledge to prevent AI-related electricity demand from raising consumer power bills, according to The Wall Street Journal. Signatories, including NextEra Energy, Duke Energy, Equinix, and Digital Realty, account for about 80% of power delivered to US homes and businesses. The commitments include paying for grid upgrades, negotiating separate electricity rates, and coordinating with grid operators to reduce the risk of blackouts. However, enforcement may be difficult because state regulators often determine power prices. The initiative comes as communities and lawmakers push for data center moratoriums amid concerns about rising electricity costs, infrastructure strain, and environmental impacts. Industry leaders warn that tighter restrictions could push AI development overseas, while supporters say data centers can generate jobs, tax revenue, and local economic growth.
• FMI's 2026 Energy and Power Overview forecasts a multiyear investment cycle as data centers, manufacturing, electrification, aging infrastructure, and resilience needs drive electricity demand and utility spending. US power construction spending is projected to rise from $158 billion in 2025 to $255 billion in 2030, with transmission and distribution accounting for roughly half of forecast activity. Natural gas generation is expected to lead growth because utilities need firm, dispatchable capacity, while solar and battery storage remain the main sources of new renewable power. For electricity generation and distribution companies, these trends could expand project pipelines, modernization work, asset replacement, and recurring reliability spending. However, turbine shortages, interconnection delays, permitting constraints, tariffs, equipment costs, and limited skilled labor could postpone projects and raise capital requirements. Utilities will also need more flexible, bidirectional distribution systems to accommodate distributed solar, batteries, and other grid-edge resources.
• A draft US Department of Energy National Transmission Needs Study says expanding interregional transmission and strengthening links between grid operators offer the greatest potential to reduce congestion and improve grid reliability, according to Utility Dive. Congestion added $12 billion to wholesale power costs in 2024, up from $11 billion in 2023, and DOE expects them to continue increasing. The report identified high-value opportunities for new transmission between ERCOT and neighboring grids, the Eastern and Western interconnections, and several regional grid operators. DOE also found the Southeast would benefit significantly from stronger transmission connections with neighboring systems. From 2016 through 2024, about 150 miles of interregional transmission was built annually, incumbent utilities developed 98% of transmission projects, ERCOT added the most transmission mileage, and PJM's eastern region had the highest annual transmission spending.
• Engineering News-Record reports that federal and state governments are expanding support for nuclear power as AI and manufacturing drive record electricity demand. The Trump administration plans to offer up to $17.5 billion in loans for 10 reactors at five sites, aiming to standardize equipment purchases, strengthen supply chains, and shorten project timelines. Utilities would commit equity upfront, while Westinghouse and project partners would jointly own each plant. Supporters say repeated construction could reduce costs and improve execution after delays and overruns at Georgia's Vogtle project. However, critics note the loans would cover only a small share of the reactors' potential $200 billion total cost, and no construction contracts have been finalized. More than 25 states have also adopted nuclear-friendly policies, including incentives for large reactors, small modular reactors, and advanced technologies.

Industry size & Structure

A typical electric power company operates from multiple locations and has revenues of about $230 million per year.

• There are 2,441 firms providing electric power utility services in the US, employing 413,100 workers, and generating annual revenue of $562 billion.
• 59.1% are publicly owned utilities, 25.6% are cooperatives, 5.2% are investor-owned utilities, 8.6% are power marketers, and 1.5% are either community choice aggregators, behind-the-meter (on-site generation), or federal power agencies.
• Public utilities serve 15.3% of US customers, cooperatives serve 13.4%, investor-owned utilities serve 65.7%, power marketers serve 4.7%, and behind-the-meter (on-site generation) serves 0.8%.
• 67% of establishments have fewer than 20 employees, and 7% of firms are large with 100 or more employees.
• Large electric power utilities include: Exelon Corp., Southern Co., First Energy, Puerto Rico Electric Power Authority (PREPA), PSEG Long Island, Los Angeles Department of Water and Power (LADWP), Withlacoochee River Electric Cooperative, Cobb Electric Member Corporation and Middle Tennessee EMC.
• Entry into the business as a for-profit enterprise in the distribution business is difficult as most population centers are in franchised territories as designated by the state public utility commission. Entry into the generating business as an independent power producer (IPP) has a lower barrier, requiring only permits and capital for construction and certification by the ISO.