Electric Power Generation & Distribution

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 2,000 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.

Shift to Natural Gas Generation

Low natural gas prices and restrictions on coal and nuclear plants are causing a shift to natural gas for new generating capacity.

Industry size & Structure

A typical electric power company operates from multiple locations and has revenues of about $287 million per year.

    • There are 2,000 firms providing electric power utility services in the US, employing 500,500 workers, and generating annual revenue of $574.6 billion.
    • 59% are publicly owned utilities, 25.2% are cooperatives, 5.2% are investor-owned utilities and 9.3% are power marketers.
    • Public utilities serve 14.5% of US customers, cooperatives serve 13.2%, investor-owned utilities serve 67% and non-utilities and power marketers serve 4.8%.
    • 45% of establishments have fewer than 20 employees, and 20% of firms are large with over 100 employees each.
    • 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.
                                Industry Forecast
                                Electric Power Generation & Distribution Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 21, 2024 - Electricity Demand Growth to Boost Generation Investments
                                • Grids expect strong electricity load growth in the coming years amid increased investments in manufacturing, data centers, and the electrification of transportation and buildings, according to construction consultancy and investment banking firm FMI’s First Quarter 2024 North American Engineering and Construction Industry Overview. Load growth is expected to see an average annual rise of 5% after remaining closer to 0% over the past decade. Total US spending for power projects is forecast to increase by 11% in 2024, according to FMI. Power spending growth will slow to 2% in 2025, 3% in 2026, and 2% in 2027.
                                • There are currently about 22 gigawatts (GW) of small modular reactor (SMR) projects worldwide in various stages of development, up 65% compared to 2021, according to a recent report by Wood Mackinzie. The US leads with nearly 4 GW in announced SMR projects and another 3 GW in early development or pre-development. While most SMR projects are not yet under construction, the world’s first commercial SMR project came online in 2023 in China. In its global net zero outlook, Wood Mackinzie expects SMRs will account for about 30% of the world’s global nuclear fleet. While most SMR deployments are expected to provide power to grids, energy-intensive industries – including oil & gas extraction, data centers, and petrochemical manufacturers - are also making SMR investments. Support for SMR projects is gaining momentum after the US and 24 other countries pledged to triple nuclear power capacity by 2050 during a United Nations climate summit in Dubai in December 2023.
                                • The US installed a record 32 gigawatts of new solar generation capacity in 2024, according to a March report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. Solar installations in 2024 increased 51% over 2022, marking the first time capacity additions surpassed 30 GW in a single year. Solar energy also accounted for 53% of all new electricity-generating capacity added in 2023. The SEIA’s CEO said the incentives included in the Inflation Reduction Act have helped unleash solar investments. While solar additions are expected to continue, the pace of growth will slow, as much of the capacity added in 2023 was due to projects that were delayed in 2022 due to trade restrictions and supply chain disruptions.
                                • After the passage of the Inflation Reduction Act (IRA) in 2022, several research groups created projection models for anticipated gains in renewable energy and electric vehicle (EV) deployments, according to Utility Dive. Researchers have found that while 2023 solar installations, EV purchases, and battery storage kept pace with or surpassed projections, wind development fell behind, according to Anand Gopal, executive director of policy research at Energy Innovation. Wind generation capacity additions fell to 6.3 gigawatts (GW) in 2023 compared to 14.5 GW deployed between 2020 and 2021. A lack of transmission availability near ideal wind farm locations and higher costs have hindered wind development.
                                Get A Demo

                                Vertical IQ’s Industry Intelligence Platform

                                See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                                Build valuable, lasting relationships by having smarter conversations -
                                check out Vertical IQ today.

                                Request A Demo