Water Industry Dynamics

The United States water and wastewater industry has two main segments: (i) utility, which involves supplying water and wastewater services to customers, and (ii) general services, which involves providing water and wastewater related services to water and wastewater utilities and other consumers on a fee-for-service contract basis.

Utility Segment

The utility segment includes municipal systems, which are owned and operated by local governments, and investor-owned systems. American Water's water distribution system is an example of an investor-owned utility. Government-owned systems make up the vast majority of the United States water and wastewater utility segment, accounting for approximately 84 percent of all community water systems and approximately 98 percent of all community wastewater systems.

The utility segment of the water industry is highly fragmented, with approximately 53,000 community water systems and approximately 16,000 community wastewater facilities (according to the United States Environmental Protection Agency, or EPA). There are a few large water utilities, and of these, American Water is the largest investor-owned utility. Our subsidiaries that provide water and wastewater services to customers are generally subject to economic regulation by the state PUCs in the states in which they operate. The federal government and the states also regulate environmental, health and safety and water quality matters.

General Services Segment

General services encompasses those services surrounding the supply of water and wastewater, including engineering, consulting and sales of water infrastructure and distribution products.  These services are provided to water and wastewater utilities and other consumers on a fee-for-service contract basis and are not subject to economic regulation

American Water currently provides non-regulated services through its Contract Operations, Homeowner Services and Applied Water Management Groups. For more information on our non-regulated service offerings visit our Products & Services site.