Water Supply and Sewage Treatment
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 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.
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 75% and 90% 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. Just over 15% 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 EPA, approximately 90% of the US population obtains its water from community water systems and 10% obtains water from private wells. The US has 52,000 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.
Industry Forecast
Water Supply and Sewage Treatment Industry Growth
Recent Developments
Jan 24, 2025 - EPA Report Highlights Dangers of PFAS in Biosolids
- In a highly anticipated report released in mid-January, The EPA warned that two types of PFAS chemicals in biosolids can pose a health threat at levels as low as 1 part per billion, according to Waste Dive. The EPA found that two perfluoroalkyl substances (PFOA and PFOS) can leach from biosolids - or sewage sludge - if applied as a fertilizer, deposited in landfills, or incinerated. The EPA study focused on land application of biosolids because of its potential impact on water and food supplies. While the EPA’s findings do not involve an enforcement element, the agency recommends removing PFAS upstream from water treatment facilities.
- In December, the US Department of the Interior announced $849 million for $77 water system improvements in 11 western states, according to Construction Dive. The funding, which is provided through the Infrastructure Investment and Jobs Act, will go toward water delivery, storage, and safety improvements, boosting hydroelectric power generation and enhancing water treatment. Much of the fresh funding will focus on the Colorado River Basin, which serves the water needs of nearly 10% of the US population and has been suffering from the worst period of drought in more than 1,000 years. States receiving water project funding include Arizona, California, Colorado, Idaho, Montana, New Mexico, North Dakota, Oregon, South Dakota, Utah, and Washington.
- The EPA issued a final rule in October 2024 requiring the identification and replacement of all US lead pipes within a decade. The Infrastructure Investment and Jobs Act includes $15 billion for lead pipe replacement, and in 2021, the Biden administration set aside $11.7 billion in funding through the Drinking Water State Revolving Funds (DWSRF) program. Another $2.6 billion in DWSRF funding was announced in October. About nine million homes receive drinking water from lead pipes. The American Water Works Association estimates the actual compliance costs for meeting the lead pipe removal timeline could exceed $900 billion.
- More than 20% of the US population may rely on groundwater that has detectable levels of PFAS (per- and polyfluoroalkyl) substances, according to a report released in late October 2024 by the US Geological Survey (USGS). PFAS are a family of chemicals that have been used in a wide range of applications, including food box linings, non-stick cookware, and fire-fighting foams. Commonly referred to as “forever chemicals” because they are slow to break down in the environment, PFAS can have adverse health effects, according to the EPA. The USGS estimates that 71 to 95 million people in the lower 48 states who rely on groundwater may have PFAS in their drinking water supply. In addition to a scientific report, the USGS has released an online, interactive map allowing users to access probability estimates for the presence of PFAS.
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