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.

Sep 23, 2026 - EPA Removes Power Plant Carbon Limits

• The Environmental Protection Agency moved to repeal federal greenhouse gas limits for coal- and gas-fired power plants, reversing major climate rules adopted under the Biden administration, according to The New York Times. The action removes federal carbon-control requirements from affected plants while other air-pollution rules remain in place, and legal challenges are expected. Power generators operating fossil-fuel plants could face lower federal compliance costs or fewer requirements for carbon-control investments if the repeal remains in effect. Utilities still must account for state policies, fuel economics, financing conditions, customer demand, and the possibility that future litigation or administrations could change requirements again. Supporters of the rollback emphasize reliability and regulatory costs, while opponents argue it will increase power-sector greenhouse gas emissions.
• Utility Dive reports that the Natural Resources Defense Council (NRDC) projects recent federal energy-policy changes could reduce planned US wind, solar, and energy-storage additions by 390 gigawatts (GW) to 540 GW over the next decade. NRDC cited changes to tax credits, tariffs, and offshore wind policy and estimated that at most 9 GW of additional gas capacity would be added under these policies, partly due to turbine supply constraints and fuel price uncertainty. The projections represent NRDC's analysis and depend on assumptions about future policy, costs, and project development. If additions to renewables and storage slow materially, utilities and grid operators may need to reassess generation portfolios, capacity needs, transmission plans, and reliability strategies. Developers also could face a more uncertain investment environment as federal incentives and permitting conditions change.
• The US Energy Information Administration expects US electricity generation to rise 2.2% to a record 4,368 billion kilowatt-hours in 2026 and grow another 1.7% in 2027. EIA says data center development and increased manufacturing activity are driving particularly strong commercial and industrial demand in the West South Central region. Rising electricity sales can support investment in generation, transmission, distribution, and grid capacity as utilities work to serve new large loads. Natural gas is expected to provide 40% of generation in both 2026 and 2027, while coal's share falls from 16% to 14%, wind rises from 11% to 12%, and solar increases from 8% to 9%. The changing mix may require utilities to balance capacity additions, fuel supply, and grid integration needs.
• Power plant owners who have benefited from rising electricity demand are facing greater uncertainty as regulatory changes affect data center connections and capacity-market economics, according to The Wall Street Journal. In Texas, a pause on new data center grid connections could delay projects that would have increased power demand, while changes in grid operator PJM are intended to encourage new generation and direct contracts with large load operators, primarily data centers. Existing generators may face greater uncertainty over future capacity prices and the timing of data center demand. At the same time, operators with available generation may still have opportunities to serve large customers seeking dependable power without waiting for entirely new plants. The shifting rules increase the importance of project location, interconnection policy, contracting structures, and market-specific capacity economics.

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.