• Strategy
  • CFO Magazine

Water for Profit

Undaunted by tight regulations and huge infrastructure costs, companies dive into the water business.

Aqua America, meanwhile, recently entered the septic-treatment and -hauling sector, an area that now accounts for about 10 percent of its revenue. CFO David Smeltzer says he is keeping his eyes open for related activities as well, in case the opportunities to make a profit by investing in existing infrastructure dry up. “Long term, there may be a point when capital expenditure starts to swing, and we may need to look at other areas of business outside regulated utility,” he says.

But Standard & Poor’s equity analyst Stewart Scharf thinks that water companies need to stick to their knitting, for the most part. “Whatever systems or related businesses they have that aren’t regulated are an additional opportunity,” he says, “but the core business is the regulated side.” — A.N.S.

Water, Water, Everywhere

Top publicly traded water companies in the United States, by revenue

Name Regulated Reach Revenue (2005)*
American Water (owned by Germany-based RWE) 18 million residents in 29 states $2.2 billion
United Water (owned by France-based Suez) 2 million residents in 8 states $495 million
Aqua America 2.8 million residents in 13 states $497 million
California Water Service Group 2 million residents in 4 states $321 million
American States Water 267,000 residents in CA, AZ $240 million
SJW 1 million–plus residents in CA, TX $180 million
Middlesex Water 58,500 residents in NJ $74 million
Connecticut Water Service 275,000 residents in CT $51 million
Artesian Water 234,000 residents in DE $45 million
York Water 165,000 residents in PA $26.8 million
* Includes nonregulated revenue

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