Trystan Casey
Electric utilities are companies that generate, transmit, or distribute electricity to public and industrial consumers. There are around 3,000 electric utility companies in the US, providing power to over 140 million customers. These utilities generated more than 2,200 terawatt-hours of electricity in 2022. The US has three main types of electric utilities: investor-owned utilities (IOUs), publicly owned utilities, and cooperative utilities or co-ops. While IOUs make up a small share of electricity providers, they tend to serve the most customers, especially in densely populated areas. On the other hand, co-ops are not-for-profit, member-owned utilities that are prevalent in the Midwest and Southeast.
| Characteristics | Values |
|---|---|
| Number of electric utility companies | Around 3,000 |
| Number of customers | More than 140 million |
| Electricity generation in 2022 | More than 2,200 terawatt-hours |
| Types of electric utilities | Investor-owned utilities, publicly owned utilities, and cooperative utilities |
| Number of cooperatives | 812 |
| Average number of customers per cooperative | 24,500 |
| Largest cooperative | Pedernales Electric Co-op, Johnson City, Texas |
| Number of customers of the largest cooperative | 333,809 |
| Number of Utilities businesses in 2023 | 55,226 |
| Number of Utilities businesses in 2024 | 55,997 |
| Utility with the highest number of customers in 2023 | Southern California Edison |
| Leading U.S. electricity utility in terms of customers in 2022 | Florida Power & Light Co |
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What You'll Learn
- Investor-owned utilities (IOUs) served 72% of customers in 2017
- Cooperatives (co-ops) are not-for-profit, member-owned utilities
- Public power utilities are not-for-profit, community-owned, and locally governed
- Southern Company is the largest US utility based on revenue
- The US has seen impressive growth in renewable energy capacity
Investor-owned utilities (IOUs) served 72% of customers in 2017
The United States has around 3,000 electric utility companies, which are primarily of three types: investor-owned utilities (IOUs), publicly-owned utilities, and cooperative utilities. IOUs are large electric distributors that issue stock owned by shareholders. In 2017, according to the U.S. Energy Information Administration's (EIA) electric power sector survey, almost 3,000 electric distribution companies were operational in the country. Of these, 168 were IOUs, serving an average of 654,600 customers each. This means that IOUs served 72% of all electricity customers in the country, or three out of every four customers.
IOUs are most prevalent in heavily populated areas on the East and West coasts of the US. For instance, the two largest IOUs, Pacific Gas and Electric and the Southern California Edison Company, are both located in California and together serve over 10 million customers. In comparison, the number of publicly-owned utilities in 2017 was not provided, but these utilities are typically found in smaller cities and towns, where local governments set up their own electric distribution systems.
The third type of utility, cooperatives, are also prevalent in rural areas. In the mid-1930s, only 10% of rural homes in the US had electricity. The Rural Electrification Act of 1936 provided electricity to these communities, and farmer cooperatives began to form to bring power to regions not covered by IOUs or municipal utilities.
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Cooperatives (co-ops) are not-for-profit, member-owned utilities
Co-ops reinvest their profits into infrastructure or distribute them to members as dividends. They are responsible for essential service delivery to primarily rural areas, providing electricity, water, and telecommunications. They also provide other services such as telehealth and online education. Co-ops create local jobs and deliver cultural and social benefits to the communities they serve.
There are two types of electric cooperatives: distribution cooperatives and generation and transmission (G&T) cooperatives. Distribution cooperatives serve residences and businesses that make up their membership. G&T cooperatives sell wholesale power to distribution cooperatives and are owned by their member cooperatives. Many electric cooperatives have formed their own G&Ts to supply their member-owners with electricity.
In the US, there are around 3,000 electric utility companies, and cooperatives make up more than 33% of this number. Electric co-ops alone account for 832 of these, with 64 G&T cooperatives providing wholesale power to the distribution cooperatives. Co-ops are meeting member expectations by reducing emissions and switching to natural gas and renewables.
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Public power utilities are not-for-profit, community-owned, and locally governed
There are around 3,000 electric utility companies in the United States, providing power to more than 140 million customers. These companies are categorised into three types: investor-owned utilities, publicly owned utilities, and cooperative utilities.
Public power utilities fall under the category of publicly owned utilities. They are not-for-profit, community-owned, and locally governed. They are similar to public schools and libraries in that they are owned by the community and run as a division of local government. Local citizens have a say in utility decisions, including the rates charged and the sources of electricity.
Public power utilities are governed by a local city council or an elected or appointed board. They provide electricity to customers at the lowest rates, and citizens can also decide whether their community-owned utility can be sold to a private entity. Public power utilities serve around 55 million Americans across 2,000 communities in the United States, including large cities like Los Angeles, Seattle, Nashville, and Austin.
Public power utilities generate 10% of all electricity in the US and distribute or sell 15% of all power to homes and businesses. They care for the environment by buying or generating electricity from diverse sources, including renewable energy sources such as solar, water, and wind. In 2023, about 41% of the power generated by public power came from non-carbon-emitting sources.
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Southern Company is the largest US utility based on revenue
In the United States, there are approximately 3,000 electric utility companies providing power to over 140 million customers. These companies are responsible for generating more than 2,200 terawatt-hours of electricity annually.
Southern Company, a Georgia-based gas and electric utility company, is the largest US utility based on revenue. It generated almost $30 billion in revenue in 2022 and is among the leading players in the gas and electric utility industry in the United States. Southern Company is a for-profit corporation and one of the largest energy providers in the country. It serves approximately 9 million gas and electric utility customers in six states, including Alabama, Georgia, Mississippi, and Florida. The company has a long history, dating back to 1924, and has expanded through acquisitions, including Alabama Power, Georgia Power, and Gulf Power.
Southern Company's subsidiaries generate electricity using various sources, including hydroelectric, gas, coal, and nuclear power. The company is also involved in nuclear power plant operations and the development of renewable energy projects. In addition to its focus on energy, Southern Company manages the National Carbon Capture Center, working with the US Department of Energy to develop carbon capture and greenhouse gas reduction technologies.
Southern Company has faced criticism for its role in funding climate change denial and spreading disinformation about climate science. The company has spent significant amounts on lobbying and has opposed initiatives to limit greenhouse gas emissions. Despite these controversies, Southern Company remains a significant player in the US energy sector and continues to grow and expand its operations.
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The US has seen impressive growth in renewable energy capacity
The US has around 3,000 electric utility companies, providing power to over 140 million customers. These companies have seen an impressive growth in renewable energy capacity. For instance, NextEra Energy, a leading US electricity utility company, has witnessed significant growth in its installed renewable energy capacity, driven by its pursuit of substantial CO₂ emissions reductions.
In 2021, the US saw a record-high 17.1 GW of wind capacity, with almost half of the 2022 wind capacity additions located in Texas. The US Energy Information Administration (EIA) predicted that solar power would account for nearly half of the new US electric generating capacity in 2022, with an expected growth of 21.5 GW in utility-scale solar generating capacity. This surpasses the previous year's additions of 15.5 GW.
According to Deloitte, solar and wind capacity contracted to US data centers reached nearly 34 GW by 2024 and could further increase to 41 GW by 2030. State policies are also influencing the transition to clean energy, with 17 US jurisdictions mandating 100% clean energy requirements. Additionally, the reduction in renewable energy prices, the establishment of carbon regulations, and growing international pressure have accelerated the shift towards renewables.
The growth in renewable energy capacity is not limited to the US but is a global phenomenon. The IEA's Renewables Market Report highlighted that additions of new renewable power capacity in 2021 were expected to reach 290 gigawatts (GW) worldwide, surpassing previous records. By 2026, global renewable electricity capacity is projected to increase by more than 60% from 2020 levels, with solar PV contributing significantly.
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Frequently asked questions
There are around 3,000 electric utility companies in the US.
There are three main types of electric utilities in the US: investor-owned utilities, publicly owned utilities, and cooperative utilities.
Investor-owned utilities (IOUs) serve the majority of customers in the US, with almost three-quarters of utility customers getting their electricity from these companies.
Florida Power & Light Co, a subsidiary of NextEra Energy, is the leading US electricity utility in terms of customers, serving over 5.7 million users in 2022. Georgia-based Southern Company is the largest US electric utility based on revenue, generating nearly $30 billion in 2022.
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