Regulated utility M&A activity up year-over-year, yet buyer restraint persists. State regulatory commissions approved 26 utility acquisitions in the opening quarter of 2025—four more than Q1 2024 yet subdued in comparison to the same period over the last decade. At the end of Q1, 96 proposed acquisitions sat in the pipeline —a 9% decline year-over-year (YOY). In their 10-K annual filings, leading investor-owned utilities (IOUs) listed unanticipated capital expenditures (CAPEX), incurrence of debt, unfavorable regulatory conditions, and significant transaction costs as assumed risks when acquiring systems. The timeliness of state utility commissions was also noted as a factor in hindering future acquisitions—a salient concern given that the past couple of years have witnessed the highest average approval times within the decade.
Economic uncertainty compounds affordability pressures for utilities. Abrupt policy shifts—fluctuating tariffs, impounded federal funding, and waning consumer confidence—have introduced significant uncertainty to long-term U.S. macroeconomic forecasts. Emerging trade tensions and the prospect of renewed tariffs are expected to drive inflationary pressures, which may prompt regulated utilities to pursue sizable rate increases for sufficient cost recovery, subject to the projected duration and impacts of economic tailwinds.
This Quarterly Review highlights key trends, transactions, and competitive shifts in the U.S.-regulated utility water market. Bluefield’s team of water experts tracks mergers and acquisitions (M&A), service contract awards, and federal, state, and local policy developments on an ongoing basis to provide the most reliable and up-to-date insights for clients addressing opportunities in water.
