Water & Sewer Utilities Industry Overview

Excerpt from Water & Sewer Utilities Report

Companies in this industry operate water treatment and water supply systems; they also operate sewer systems and sewage treatment facilities. Major companies include American Water Works, Aqua America, and California Water Service (all based in the US), along with France-based global giants SUEZ Environnement and Veolia Environnement.

Competitive Landscape

Demand depends on commercial and residential water needs, which are related to population growth and to the level of economic activity. The profitability of individual companies depends on efficiency of operations, because prices are fixed by public utility commissions (PUCs). Large companies have economies of scale in operations and the ability to raise capital for infrastructure improvements. Small companies can compete successfully through superior engineering or by serving smaller local markets. High barriers to entry, such as capital investments, make the industry somewhat resistant to competition; many companies operate as de facto monopolies. The industry is concentrated: the 50 largest companies account for 65 percent of industry revenue.

Products, Operations & Technology

Water services account for 70 percent of industry revenue, sewer services for 13 percent. Irrigation and other services account for the rest.