Utility System Construction NAICS 2371
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Industry Summary
The 17,800 utility system construction firms in the US are specialty contractors that develop buildings, structures, and distribution networks associated with water, sewer, petroleum, gas, power, and communication systems. Firms provide new construction, reconstruction, rehabilitation, and repair services. Companies may specialize in a utility sector or offer services across multiple utilities.
Difficult Work Site Conditions
Utility construction projects can involve complex site conditions, including difficult to reach terrain and underground locations.
Seasonality and the Weather
Seasonal demand for utility system construction services creates uneven cash flow.
Recent Developments
Nov 17, 2025 - Chevron Plans an Off-Grid, Gas-Fired Power Plant
- Chevron plans to build a 2.5-gigawatt off-grid power plant in West Texas by 2027 that's powered by the company's natural gas, according to The Wall Street Journal. The facility, designed to support an AI data center, could expand to 5 gigawatts, signaling rising demand for large-scale, private energy infrastructure. Partnering with GE Vernova and Engine No. 1, Chevron’s move reflects growing interest from hyperscalers as grid limitations intensify. Chevron’s experience operating remote power in Kazakhstan and Australia positions it to scale quickly, though its long-term commitment to power remains uncertain. As tech firms seek reliable energy, utility contractors may see increased opportunities in turbine installation, transmission systems, and off-grid energy development.
- In October, the Interior Department canceled Esmeralda 7, a massive solar project in Nevada that would have spanned 118,000 acres and powered nearly two million homes, according to The New York Times. Though the reason was not disclosed, the move aligns with the Trump administration’s broader efforts to slow renewable energy development on public lands, while encouraging oil and gas development and coal mining. The project, led by NextEra Energy and Invenergy, had advanced under the Biden administration but stalled after the Bureau of Land Management withheld its final environmental impact statement. Developers may reapply for permits, but delays are likely. Lawmakers and clean energy advocates expressed concern over new political reviews, which have disrupted wind and solar projects nationwide. The cancellation highlights growing tension between federal energy policy and climate goals.
- Dominion Energy’s 2.6-GW Coastal Virginia Offshore Wind project is 66% complete and on track for completion by late 2026, despite vessel delays, according to Utility Dive. The $11.2 billion project, a joint venture with Stonepeak, will be the largest US offshore wind farm. First power delivery is expected in early 2026. Tariffs may raise costs by $690 million, but Dominion projects a levelized cost of $84/MWh, still within its original range. Dominion’s electric sales rose 3.3% year over year, and data center demand continues to surge, with over 58 GW of requests since 2020. The company is pursuing a $50 billion capital plan across transmission, thermal, and renewable projects, including solar, storage, and a new gas plant. CEO Robert Blue emphasized bipartisan support and the project’s role in serving critical infrastructure.
- North American construction and engineering spending for power projects in 2026 is expected to rise 4% after anticipated flat growth in 2025, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Amid demand from data centers, electric vehicle adoption, and electrification in manufacturing, electricity consumption is expected to see average annual growth of 5% through 2028, according to the US Energy Information Administration. To support rising demand, power infrastructure investments are expected to rise 9% in 2027, 7% in 2028, and 4% in 2029.
Industry Revenue
Utility System Construction
Industry Structure
Industry size & Structure
The average utility construction firm employs 34 workers and generates about $11.4 million in annual revenue; the average water and sewer line construction firm employs 15 workers and generates $4 million annually; the average oil and gas pipeline construction firm employs 103 workers and generates about $27 million annually; and the average power and communication line construction firm employs 44 workers and generates about $12-13 million annually.
- The utility system construction industry consists of about 17,800 companies that employ 602,800 workers and generate about $158 billion annually.
- • The oil and gas pipeline segment and the power and communications segment are concentrated at the top with the 50 largest firms representing 57% of total revenue for both segments. The water and sewer segment is more fragmented with the 50 largest firms representing just 19% of the segment's total revenue.
- The utility system construction industry includes several large players with national to near-national scope, regional firms, and many small independent firms that often serve as subcontractors to larger firms and operate within a limited geographical market.
- Large companies include MasTec, Dycom Industries, and Granite Construction. Some large firms have international operations.
Industry Forecast
Industry Forecast
Utility System Construction Industry Growth
Source: Vertical IQ and Inforum
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