Water Supply and Sewage Treatment

The 3,900 water supply and irrigation system companies in the US store, pump, treat, and deliver water to customers. The 340 sewage treatment companies operate sewer systems or sewage treatment facilities that collect, treat, transport, and recycle wastewater. The sale of water accounts for the majority of industry revenue. Large firms may offer both water supply and sewage treatment services. Some firms also offer other types of utilities, such as electric power or gas.

Aging Infrastructure and Funding Gap

The water and wastewater infrastructure in the US is aging, and many systems are nearing the end of their useful life and in desperate need of modernization and replacement.

Rising Rates

Despite public pressure to keep rates low, the water supply and sewage treatment industry has been able to raise rates consistently with healthy increases over time.

Sep 24, 2026 - Wetlands Proposal Could Narrow Federal Jurisdiction

• The New York Times reports that the Environmental Protection Agency and the US Army Corps of Engineers proposed changes that could substantially narrow the range of wetlands and streams that receive federal protection under the Clean Water Act. The proposal would use a stricter standard for determining when wetlands have a continuous connection to federally regulated waters. Environmental groups argue the change could leave large areas of wetlands and intermittent streams without federal safeguards, while agricultural and industry groups say clearer limits could reduce regulatory uncertainty. Changes in federal jurisdiction could affect water utilities through permitting, source-water protection, watershed conditions, and stormwater planning. Utilities may need to monitor how final rules change responsibilities between federal, state, tribal, and local regulators.
• A coordinated hacking campaign targeted drinking water and wastewater systems in at least 12 states, exploiting vulnerable internet-connected industrial control equipment, according to Cybersecurity Dive. More than 30 Minnesota water systems were targeted in late July, while incidents in Georgia and New Jersey caused temporary operational disruptions but no confirmed contamination or prolonged service outages. Authorities suspect Iran-linked threat groups, although officials have not determined whether a single group carried out all of the attacks. The campaign has intensified calls for stronger cybersecurity standards, additional federal funding, better threat intelligence sharing, and improved protections for programmable logic controllers. Federal officials and equipment vendors are urging utilities to use multifactor authentication, remove devices from the open internet, strengthen passwords, replace unsupported software, and restrict access to critical operational technology.
• The Environmental Protection Agency (EPA) announced $11.75 million in grants for 10 midsize and large drinking water systems to strengthen cybersecurity and resilience against extreme weather. Projects include supervisory control and data acquisition (SCADA) systems and programmable logic controller upgrades, generators, storage and transmission improvements, a new well facility, dam work, and smart monitoring equipment. EPA said cyberattacks on critical water infrastructure have increased and noted more than 100 drinking water and wastewater systems across 12 states were targeted in high-profile attacks this year. Water utilities may face growing pressure to modernize control systems, strengthen backup power, and harden physical infrastructure. Federal grants can offset some capital costs while encouraging broader adoption of cybersecurity, monitoring, and resilience investments throughout the industry.
• Engineering News-Record reports that House and Senate committees unanimously advanced separate versions of the 2026 Water Resources Development Act, including major provisions for water supply infrastructure. The Senate bill would authorize $16.5 billion for the Drinking Water State Revolving Fund from 2027 through 2030 and $260 million for the Water Infrastructure Finance and Innovation Act program. These funds could help water utilities finance treatment plants, pipelines, storage facilities, and projects needed to meet regulatory requirements while limiting pressure on customer rates. Both versions would also expand project delivery flexibility and partnerships with nonfederal entities, potentially reducing costs and accelerating construction. The Senate measure would direct the EPA to study technologies for detecting, monitoring, capturing, and removing microplastics and nanoplastics, potentially shaping future treatment standards and capital spending for water utilities.

Industry size & Structure

The average water supply and sewage treatment company employs 11-18 workers and generates $4 million in annual revenue.

• The water supply and irrigation system industry consists of about 3,600 firms that employ about 39,500 workers and generate about $12 billion annually. The sewage treatment industry consists of about 330 companies that employ about 5,800 workers and generate $1.5 billion annually.
• The industries appear concentrated; the top 50 companies account for between 71% and 87% of industry revenue. However, government ownership (at the local level) skews the concentration percentage, and both the water supply and sewage treatment industries are more fragmented than Census numbers reveal.
• The majority of community water systems and wastewater treatment systems are government-owned. About 5% of Americans receive water through investor-owned water supply utilities.
• Large government-owned systems include the New York City and Washington DC systems. Large investor-owned firms include American Water, Aqua America, and United Water (Suez Environment).
• According to the Cybersecurity and Infrastructure Security Agency, approximately 80% of the US population obtains its water from public drinking water systems. About 15% of households obtain water from private wells, according to the EPA. The US has 50,000 community water systems, of which 91% serve less than 10,000 customers. The US has 16,000 wastewater facilities that serve 80% of the population.