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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

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

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

Industry Profile Excerpts

Industry Overview

The 3,300 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.

Water Consumption Falls

Conservation efforts and concern for the environment have succeeded in reducing water consumption in the US.

Industry size & Structure

The average water supply and sewage treatment company employs 11-16 workers and generates $4 million in annual revenue.

    • The water supply and irrigation system industry consists of about 3,300 firms that employ about 38,600 workers and generate about $12 billion annually. The sewage treatment industry consists of about 340 companies that employ about 5,400 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
                                  Source: Vertical IQ and Inforum

                                  Coronavirus Update

                                  Apr 19, 2022 - Wastewater Surveillance Gains Importance Amid Drop in Clinical COVID-19 Testing
                                  • The Centers for Disease Control and Prevention (CDC) set up a wastewater surveillance system in September 2020 and now funds sewage monitoring efforts in all 50 states, according to The New York Times. The agency is in the process of adding about 500 testing sites nationwide. Wastewater surveillance can help determine which variants are dominant in a community, which can help doctors make critical treatment decisions. For example, two of the three monoclonal antibody treatments approved for COVID-19 are ineffective against Omicron but work well against Delta. Sewage data can also help detect outbreak hotspots for better allocation of healthcare resources. Public health experts say the US needs to make more investments to expand and better coordinate wastewater surveillance to gather more data and share it more quickly. As at-home test kits have become more widely available less testing is taking place in a clinical setting, resulting in fewer testing data which has highlighted the usefulness of wastewater surveillance to determine levels of coronavirus in a given community.
                                  • After the Supreme Court struck down the moratorium on evictions last summer, many expected a flood of evictions, but that never materialized, according to CBS News. Congress enacted the Emergency Rental Assistance (ERA) program in 2021 to prevent evictions during the coronavirus pandemic. Of the $46 billion allocated, as of the end of February 2022, the ERA program had paid out $30 billion to 4.7 million households. The remainder of the ERA funds is expected to be paid out by mid-2022. Once emergency funds run out, the US Treasury Department urges state and local governments to provide additional funding from the $350 billion they received through the American Rescue Plan Act. In 2020 and 2021, US evictions fell to their lowest levels on record, in part due to federal government interventions, according to an analysis released in March 2022 by Princeton University’s Eviction Lab.
                                  • The US Treasury Department announced guidance stating that state and local Emergency Rental Assistance grantees may — at an eligible tenant’s request — provide assistance to cover remaining utility arrears at a previous address. The Treasury Department noted that assistance may be needed to remove barriers a household may face in accessing new housing if they have outstanding debt.
                                  • Increasing use of cleaning wipes during the pandemic has led to more sewer system clogs. Des Moines (IA) Metropolitan Wastewater Reclamation Authority officials say that blockages have increased 50% during the pandemic. Over the past year, the authority has spent more than $100,000 on wipe clogs and has deployed specialized blockage-clearing trucks about 30 times. The problem has gotten so bad in Charleston, SC, that the city’s water management agency filed a lawsuit against major manufacturers and retailers, accusing them of falsely labeling some wipes as flushable.
                                  • The federal government has designated about $1.1 billion for water and sewer utilities and their customers in the last two coronavirus stimulus packages. The package passed in December 2020 included $638 million in assistance for low-income water customers and water and sewer investments. Another $500 million was allocated in the stimulus bill passed in March. The latter bill explicitly designated parts of the funding for water and sewer systems.
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