Investor-Owned Utilities in Water: Market Share, Trends, and Company Rankings

The U.S. water and wastewater utility landscape is heavily fragmented, comprising 48,858 community water systems (CWSs) that serve an estimated 318.8 million people and 23,968 wastewater treatment facilities serving an estimated 267.1 million people. Within this landscape, an evolving roster of investor-owned utilities (IOUs) is reshaping the market by establishing regional and national positions (regulated and unregulated) through mergers and acquisitions (M&A) and organic growth.

The leading IOUs, which include 20 publicly traded, private equity-backed, and privately owned companies, currently serve approximately 5% of the U.S. population. Notably, an estimated 87% of these utilities’ assets serve populations of fewer than 3,300 people.

As city managers and utility leaders confront increasing challenges related to workforce constraints, regulatory issues (e.g., per and polyfluoroalkyl substances [PFAS]), and mounting capital investment needs, IOUs offer an alternative approach for managing critical water and sewer infrastructure. Their strategies involve taking on the financial and operational responsibilities of water and wastewater assets through M&A, which in some states is bolstered by favorable policies like fair market value (FMV) legislation.

This market Insight Report examines the state of private participation in the regulated water and wastewater utility sector, profiling and analyzing market share among the 20 leading IOUs while highlighting key drivers and trends to watch.