[00:00:00] Speaker A: What we've seen from these types of players are that they honestly either sink or swim in water.
[00:00:12] Speaker B: I am Rhys Tisdel and this is Futura Water, which we talk about all the ways which companies, utilities and people addressing the challenges and opportunities in water. This is episode 122. That's a lot of podcasts to listen to. So if you haven't started now, you're gonna have to go way back into the archives for several years.
And you can also start with this one maybe, because I have a feeling this is gonna be a great one. That's because today I'm joined by my colleague Bluefield analyst Megan Bondar, who has among other things, calculated market share for investor and utilities in the US this includes everything from analysis into M and a geographic expansion and just broader trend shaping this segment of the market which includes things like consolidation and such. So I find our analysis to be compelling partly because given the state of the 49,000 or so drinking water systems in the US, 23,000 wastewater systems, if anything it's fragmented and quite honestly ripe for consolidation. I use represent only small piece of the puzzle.
I hope that Megan and I can get into some of the details. But just to give you a little primer, IOUs only represent 5% of the population served. So when in fact the consolidation of all these systems need to take place and it needs to take place in multiple forms. So I know everybody points their finger at the IOUs, but munis should be rolling up munis adjacent systems when possible. Munis should be rolling up private systems when possible.
There's a role for co ops like EJ Water and then there's also a role like we've seen in Connecticut for quasi public institutions or organizations that we've already seen. So it doesn't have to be one and there's no sense in pointing the finger at one. And it's not to say that one is better than the other.
The problem is there are too many systems and they're not sustainable, whether it be because of technology, whether it be because of workforce and resources, whether it be because of financial resources.
So the end goal of all of these systems is to provide reliable service to their communities and customers.
And one way we believe to do that is roll some of them up. Not picking favorites here. So but before we get to Megan Bondar who's going to give some details, you're going to have to bear with me just a little bit because something caught my eye this past week. So this week there's been a striking disconnect that's caught my attention and one that spans digital energy and the water sectors overall. And what I'm getting at is that Bluefield Research has just released a report on water management for data centers. This includes the landscape where the activity is happening. Forecast size of market and data centers are expected to drive over $4.1 billion in water related expenditures opex and capex by 2030. So this is going to tap. I think our number is about 150 billion gallons in withdrawals for mainly their cooling systems. And this is mainly from strained municipal systems. The number shows that 97% of data center demand is coming from municipal supplies rather than other sources, surface water or groundwater.
At the same time there's some power sector leaders are also sounding the alarm that the AI driven demand projections are overblown. This is what I thought was interesting. The CEOs from companies like Constellation and Vistra warn that utility forecast may be inflated by three to five times pushing what is unnecessary buildouts of power generation, grid build out Because I think I said this not long ago that power demand in the US over the last I think 20 years is about 1.5% growth.
So I think projections show that it could spike up to three and a half to four and a half percent which is four and a half percent doesn't sound like a lot but when it's three times where we are now, it's pretty significant.
So in terms of water, when these projections miss the mark and we're not overbuilding the grid, we are also reshaping local water infrastructure based on a digital boom that they're arguing may not fully arrive. So this, this is interesting because at the same time Constellation is also a company that negotiated the deal with Microsoft for Three Mile Islands nuclear facility and generation through a power purchase agreement. So thought that was an interesting twist that was not mentioned in that conversation. But why does it matter for the water sector? In brief, overbuilding energy equals or electric power supplies equals over committing to water. So many of the new power assets which are likely to be a lot of gas fire generation, they do require water for cooling.
That's one piece of it. And given that currently 97% of data centers rely on municipal water, any demand could lock utilities into stranded water intensive infrastructure and delay the retirement also of older coal fired power plants, which kind of compounds the problem. There's a lot to unpack there. But that's really part of our energy transition analysis of Bluefield that we're looking at. Hyperscale data centers could withdraw. As I mentioned 150 billion gallons of water from 2025 to 2030.
This is the equivalent to annual use of about 4.6 million households.
That's not insignificant. Utilities aren't planning or haven't been planning. They are slow moving battleships. They have been planning for a huge jump in water demand.
That's not to say that these hyperscale data centers aren't reusing water, doing closed circuit cooling, moving to liquid cooling, which is more efficient than things like air cooling, at least water, water wise. So at the end of the day, capital could be misallocated if utilities build out for inflated forecast. You know, I will say I was speaking to Amber Walsh, who is our analyst who's more closely aligned with this and has worked on the forecasting and she was on a podcast episode. If it wasn't the last one, it was two ago I believe.
So that would be 120 episode 120 where I don't think we got into it, but we our forecast does tie to partly due to power demand. And there are three scenarios that we do look at. We took the what I would say the average, there's a high and a low and then there's sort of, you know, splitting the middle and that's one we've gone with to be slightly more conservative. So if it goes even higher, then that's a whole nother conversation and likely going to use more water. So at the end of the day, I'm not trying to sound an alarm here. I just think it's interesting and it's what caught my attention because I can see it through my LinkedIn profile articles coming through, whether it be power companies, power company executives calling for these data center developers. They're going for broke, AI or bust. And so some power companies are raising concerns. The data center developers are saying, hey, this is all going to happen.
The president himself has said, hey, we need to not decommission some coal plants because there's going to be a spike in power demand.
And we've got environmentalists also raising concerns about not only how much water is going to be used, but also what are the sources of power, particularly with the IRA Inflation Reduction act on the ropes. So this is food for thought in a conversation that needs to continue to happen. And our team at Bluefield Research continues to work on it. And this is a shout out to my friend I've known for a long time. Many thanks to Frank Rambo at Horizon Climate Initiative, who reach out to me last week to talk about exactly this issue and brought it to My attention as we talk through what's happening on the ground, at least as far as the power sector goes. What does it mean for power supplies? It also means what does it mean for the cost of power?
There's a whole nother layer of complexity about how much we're paying for if we keep the coal assets to drive some of this, or whether we switch it over to whether it be renewables or even natural gas.
That being said, let's get to Megan Mondar and talk about the role of private participation in water or utility ownership and strategies in the US market. So let's get to Megan.
All right, so I'm joined here by Megan Bondar. Megan, how's it going?
[00:09:03] Speaker A: It's going pretty good, Reese. It's good to be back.
[00:09:06] Speaker B: Nice. Yeah. This is number two for you. Sure is, yeah. So it's Friday, headed into the weekend. What are you doing this weekend? Where are you? Maybe let the listeners know where you are and what you're going to do this weekend.
[00:09:18] Speaker A: Yeah. So I'm calling out of Bluefield's Boston office. And this weekend I'm looking forward to playing a bit of tennis.
I'm an avid tennis player, so hopefully there should be pretty good weather this weekend for that.
[00:09:31] Speaker B: Nice. All right, we talked about this. We're not supposed to talk about weather on the podcast. Everybody wants to talk weather.
[00:09:36] Speaker A: Yeah, I broke the cardinal rule already.
[00:09:38] Speaker B: So that took about 15 seconds.
But what we can talk about though is the role of investor and utilities in the US and their footprint. And, you know, who are they? What are they? So let's just start from the top. So when we talk about investor and utilities, who are these companies, where do they operate? What's their scale of impact, if you want to put it that way. Get us a brief overview. So it allows us to dive in deeper into what they're actually doing.
[00:10:08] Speaker A: Sure, let's go right into it.
So just to add a bit of context, this past month, the utility strategies and ownership team here at Bluefield, previously known as Private Water, we released our annual market analysis of the leading investor owned utilities across the US and we primarily focused upon the top 20 IOUs by owned connections across the country.
So at the forefront of this competitive landscape, we have American Water, which holds about 39% of the market share amongst this peer group. And American Water is followed by essential utilities at 12% of the market share. And then we have Veolia North America at 7%.
Looking at this peer group, collectively, they serve roughly 5% of the U.S. population, which equates to about 9 million connections at the national level.
If we want to zoom out at the overall utility landscape across the US it's pretty highly fragmented. These utilities addressable market.
So there's about 49,000 community water systems across the country and about 24,000 wastewater treatment facilities.
So the top IOUs have historically primarily targeted drinking water connections. But I think an increasingly growing area that's important to note is wastewater because if we look at American Water for example, their wastewater connections have grown by actually over 40% over a five year time span. 2019, 2024.
So that's a pretty interesting area to look at moving forward.
And in terms of where these IOUs are located and concentrating their activity, Texas, Arizona, Pennsylvania, these markets immediately come to mind as places with more favorable regulatory policies for these investor owned utilities as well as place their non compliant systems are in volume.
[00:12:09] Speaker B: Okay, so this makes a lot of sense to me. So but just for the listeners, just sort of break this down because there's a lot to unpack there. Right, so these are privately owned, some, some of which what we are publicly traded. These are companies that have broader geographic footprints and let's say one system or set of, you know, one system like let's say Boston Water and Sewer. So you mentioned companies like American water, essential utilities, Viol.
That makes perfect sense. And then of these 49,000 or I think use 23,000 wastewater systems, they represent really a pretty small share of the total population served. That makes sense. And so they are, you know, you mentioned M and A. Right. And they're active in specific states driven by policies.
And so.
Well, let's talk about that M and A. Let's talk about consolidation if you will.
What's the scale of their deal activity and who's moving the needle?
[00:13:14] Speaker A: Sure thing. So Bluefield has tracked regulated utility M and A activity across the country for the past decade.
And so we've looked at about 1500 approved deals in all. And within this timeframe IOUs acquiring other IOUs connections have accounted for a pretty pretty significant share of connections transferred and acquired, hovering around 30, 31%. And this is pretty notable to see because these deals account for actually pretty small volume. So like out of these approximately 1500 or so deals, these massive major mergers have accounted for just 20 of those 1500 deals.
So and some of these notable transactions could include SJW Group, which has now rebranded, branded itself as H2O America, acquiring Connecticut Water Service as well as the Veolia Suez merger.
[00:14:13] Speaker B: So the one thing about consolidation, maybe I just for clarity's sake, just stepping back a little bit, the these IOUs, as we mentioned, they're 5% of the population served in the U.S. there are. And so let's think about, talk about the other 95%. Right. Just clarity's sake. So we've got, you know, you got municipal utilities, I already mentioned Boston Water and Sewer. That's publicly, that's a municipal utility owned by the municipality.
You've got, you've got some co ops like EJ Water in Illinois I believe. So EJ Water is, it's a unique or maybe even a smaller approach which is being deployed. You've got quasi public entities. I think maybe we can get into that in a little bit. You know, the one in Connecticut. One in Connecticut stands out specifically in relation to Eversource.
And then not an insignificant chunk of population served in ownership definitely by number of systems or privates. Right. You know, that's, is that 10% of the total. So that's really the landscape of which they're all playing. They're not all necessarily competing. Right. It's the IOUs that are the most active when it comes to M and A.
They've got the scale and the footprint and that is one strategy for their growth. Right. Just to confirm.
[00:15:41] Speaker A: Yes, that's right. And I think you made it make a great point about considering all the other players in context because even when we think about say privatization.
So a private system such as an investor owned utility acquiring a municipality. So if we look back at our decade of data, we see that on average there's been about like a little over between 120 to 140 deals approved on average each year. And then out of those 120, 140ish deals, we see that only about like 18 to 20 of those have been privatizations. So these types, these profile of deal flow like tend to make up like, you know, you see them in the headlines and they, they are like you know, make major news. But they do end up being a very small share of what we end up seeing overall. So what we tend to see is, you're right, these privately owned systems, buying privately owned systems and this isn't just exclusive to IOUs purchasing other IOUs. These could be like very small privately owned systems and say rural Pennsylvania acquiring another or or so the bulk of the deal flow that we're seeing is privately owned purchasing privately owned versus privately owned purchasing municipally owned.
[00:16:56] Speaker B: Yeah, I think that makes sense. And the reason I raised this and you know, Bluefield, this is something we've been looking at a long time. We work with a number of IOUs and have great relationships with them and the organizations they're associated with. But I think, you know, one of the things we're working through at Bluefield is there are too many systems, right? There are too many drinking water systems. You know, you could argue too many wastewater systems, but fundamentally speaking, you know, that fragmentation is. Is too great. It's too great to manage economically, you know, or financially. From the.
From the owner standpoint, the number that we've thrown out there is. And this doesn't come from us. I think it comes from a while back, or at least they've used the number. And that is 85% of utilities in the US employ less than three people. If that's not the exact number, it's probably not far from that, because so many of these systems serve less than 3,300 people, let alone 500 people in many cases. And so my point is, we're not trying to play favorites here. I think there is a need for consolidation, regionalization, the fact that people argue about what to call it, and quite honestly, this is where this is my opinion. People get upset by saying, oh, you can't use the word privatization. Oh, you can't use the word consolidation. Oh, you should be using regionalization, or all the above.
That's not the issue. That doesn't solve the problem. The problem is, is that there are too many systems and they need to be rolled up. It doesn't matter who owns them. The point is to provide reliable service, drinking water service, wastewater services, to communities, many of which are disadvantaged, many of which can't afford to do the upgrades. So. But the most active in this space are IOUs. And I think you raised exactly the perfect point, that there's a small number of deals of what you would call privatizations, meaning an IOU buying a muni and it catches fire in the media. And it's not always fair, that attention that it gets. That being said, let's move on. And I got a question for you. So what are the capital strategies behind IOU growth? What's beyond buying just the assets?
What are they investing in? What are what. What gets them going for the long term?
[00:19:34] Speaker A: Sure. So infrastructure investment immediately comes to mind. IOUs are motivated to invest in capital expenditures.
So amongst some of these select publicly traded leading IOUs, we see that capital expenditures have grown, on average, approximately 12% annually since 2020. And this stat signals pretty strong investment in aging infrastructure. And California Water Service alone plans to spend 2.1 billion in system upgrades through 2027.
And just to call out aging infrastructure a bit, that's certainly one of the greatest long standing challenges confronting the water sector.
And this often invites private investment from the large players that we're currently discussing, such as essential utilities, American Water acquiring other systems through tuck in acquisitions, whether privately owned or municipally owned. And there is this widening investment gap that is spurring some of these non compliant, privately owned and occasionally municipalities to find alternative capital sources like private participation.
And one policy that does help to motivate deal flow is fair market value. Which legislation for this policy is in about, I want to say it's 12, 13 states currently.
So this does incentivize acquisitions.
So utilities pay but also earn top dollar valuations on municipal systems. And this does drive capex fueled growth.
And partly because of this, as well as just the sheer volume of systems in the state, Texas has become the most active market for utility M and A in the country that we've seen.
[00:21:20] Speaker B: Yeah, and it looks like the fair market value does create sticking point. I don't know why that keeps is in my mind, but it creates a bit of friction, right.
And concern or consternation among the public. And so but the biggest states for using fair market value, because we do track the deals quarter to quarter, we know who's buying what, where, when and how and for how much should I say?
And fair market value is most active in, correct me if I'm wrong, Pennsylvania, Illinois and then Texas. And Texas actually is one of the states that is only most recently adopted fair market value legislation or policy to incentivize the consolidation of utilities. And really what's behind that is instead of looking at the depreciated value of the assets or the systems, and every state's a little bit different, they're going off of an appraised value. And what ends up happening is they get, you know, one, two or three different values and then they, you know, split the middle, let's say, or pick one that's most reasonable and then they go with that price. I think one of the challenges, you know, it does elevate the price from what it would be otherwise because a depreciated asset for a lot of these things are zero, there's not much to them. And appraised value, they are providing services to the community, they are worth something. And so the community gets more money, they get it upfront. Now what ends up happening is some of those costs are then rolled out over time and they're negotiated conditions with the, with the deal. But those are the three main states. But like you said, I think Florida is more recently. They're probably the most recent state to implement a policy such as that. Am I correct?
[00:23:10] Speaker A: Yes, that was just a couple years ago, I want to say in 2023.
[00:23:15] Speaker B: All right. So it'll be interesting to see what happens there. All right. So that's really what they're looking for, returns. Right. And like you said, I mean, I think you called out Cal Water as an example. It's not like these IOUs are not investing in these systems. So they've got, you know, 2.1 billion in system upgrades through 2027 planned.
It's interesting how they work. Just for clarity's sake is if they buy a system, they buy System A and they've got 25 other systems already existing in that state.
Those rates attached to that, whenever they decide to raise with approval of the, of the Public Utility Commission puc, those rates go across the board, across all systems. It's not just one system. So in some respects, you know, if you get acquired, all the other systems are helping to upgrade your system over time. These are, I'm simplifying, but that's the way it is. So one other trend that you've called out in the report that you've put out and we've seen this over time, is zero of private equity in the utility segment. So what's the PE angle? So are financial investors fueling or fragmenting the market landscape?
[00:24:34] Speaker A: Sure, and it's a good question. So one of the major takeaways from this year's IOU analysis was that a new utility joined the rankings and this utility is JW Water.
So private equity players can be influential market participants within the space, like, you know, capable of orchestrating large scale shakeups such as, like a new utility entering this top peer group. So JW Water holdings, backed by CVC Diff, entered the top 20 IOU peer group after acquiring eight utilities and about 41,000 connections from Robson Companies in just one loan deal.
So the fact that this single transaction had the influence to honestly reconfigure the makeup of this leading competitive landscape really does highlight the fact how one PE backed deal can reshape rankings.
So PE does have that influence per se and we are observing this influence.
[00:25:34] Speaker B: Yeah. And I, I. All right, I'm going to push back a little bit and say that the role of PE firms. So JW Water holdings, that's super interesting. Right. And I think it's really an Arizona deal, correct?
[00:25:45] Speaker A: Yes.
[00:25:46] Speaker B: So Moved in Arizona. Arizona is a growth market for IOUs. It seems there's a lot of activity there. We're seeing companies like Global Water Resources. It's been there a long time. Epcor is there.
Is NW Natural there at this point or Cal Water. I don't know if you recall offhand, but there are other, other ies are looking at it. Without a doubt, yes.
[00:26:10] Speaker A: Yeah, I believe NW Natural is currently in Arizona.
[00:26:13] Speaker B: Okay, so you've got players active in that market, but I don't want to pick, I'm not pointing just at Arizona.
The utility segment is really tough. Right. You have to be really committed to it because I think PE firms oftentimes depending on what your, what their goals are, you know, are they getting the kind of returns that they would get in other segments. And so if you're committed to it, and I would use Science Capital as a good, you know, they've really, they've got Signs Water, they've committed to it. They acquired central states a while back. I've so long ago that I've actually lost track of the date. They're incredibly active. They've been probably the most acquisitive IOU of, of all of them over the past five years and partly because their strategy is to roll up small, stressed, financially stressed, infrastructure stress systems. And now they're active and I don't know how many states, 12, 13, 14 states. I mean they've built up a really substantial footprint. And I remember when Signs got into it, a number of IOUs were saying they'll never do it. They're just buying all these small systems.
It's not going to add up to much now. What do they have? 225, 250,000 connections?
[00:27:29] Speaker A: Yeah, just about. They've definitely grown considerably in the past, like five years alone.
[00:27:35] Speaker B: Yeah. And so, so forgive my pushback, I would say, but it's still tough. Right. And because we do talk to number of other IOUs, we talk to pension plans, they look at this segment as oh, we can grow, but it's tough sledding. I mean you got, it's even somewhat what was, you know, Aqua America, it's now essential utilities. Someone said if you want to get into it, you just got to get into it and you got to find that anchor in which to, which to, you know, start as a platform. And I think that's sometimes the hardest part.
It'll be interesting to see how their position does it grow just incrementally kind of as it has because it's not an Easy landscape like other segments.
All right, so speaking of that, Megan, let's talk a little bit about regional realignments. Right, so let's talk about realignments, but also exits that are redefining competition. So we've seen some players enter, we've seen others exit. So what's the strategic intent behind some of these moves?
[00:28:40] Speaker A: Sure. So let's start off with new market entrants.
So what we've seen from these types of players are that they honestly either sink or swim in water.
So utilities in other regulated spaces, let's say natural gas, share certain commonalities with water. So this could be dealing with the same state regulatory agencies. And this could also mean like a shared need for critical infrastructure investment.
So these intersections can motivate these market outsiders to pursue attractive water acquisition opportunities that fall right into their local service areas.
And a utility that immediately comes to mind is Unito Corporation, which just recently entered the water market in New England through a $100 million acquisition of Aquarians Massachusetts and New Hampshire based assets.
So this acquisition signals the utility's intent to scale regionally.
And if we consider Eversource Energy as well, they recently announced their $2.4 billion divestment of aquarium to a quasi public entity in Connecticut.
So this deal marks the largest deprivatization that Bluefield has tracked to date. And so this shows that water isn't necessarily a fit for all diversified utilities as next era all which also attempted a foray into the water sector, was in a similar position as well. However, then you have utilities like NW Natural, which began as a natural gas provider. And this utility realized success in both the regulated and unregulated O and M water and wastewater spaces. So really we're seeing a variety of players in the market.
[00:30:29] Speaker B: Yeah, this is something we've talked about for a long time at Bluefield and that is sort of the convergence of critical infrastructure. Right. And so, and it's, it's ebbed and flowed a bit. Admittedly. I, I think we are at Bluefield are excited when there is a convergence. I think NW Natural is a, is a good example of a company that's come in. I, we believe that it had sort of had big eyes when it came into the space and said, oh, we can do this and it's tough sledding. But they realized what it took and now they're active in a number of different states. They're Oregon based, we've got natural gas, they're a natural gas service provider. But they now have positions in multiple States from Idaho to Washington, all the way to Texas. And we already talked a little bit about Arizona as well. So I think they're really good example of a player coming in the next air deal they keep. I know we talk about it, they're not an insignificant player in the the electric power, renewable space, but also natural gas as well.
Nexstar also owns FPL Florida Power and Light in Florida. So they're a huge utility there.
So the challenge they had, I think it was there are multiple factors and they're the reason why they sort of came in and out pretty quickly. Whether it be because of change in management. I've mentioned this before, the role of the ira, how they feel about the IRA now may be different, but there is some commonalities. Like you said, it's critical infrastructure, utility commissions understanding that, but also understanding how to allocate capital to large infrastructure projects and operations. And I think that's where those synergies are. So your point about Unitil coming in in New England, it will be interesting to see what they do with those Massachusetts and New Hampshire assets. And that's a platform. Right. From which they can build. Will they do more with it than what Aquarium was doing under the auspices of eversource Energy at the time? Will they do, will they buy more, they invest more in the systems? We'll see. Will they do more than when Aquarium was also owned by a private equity firm prior to eversource? So eversource has its own issues it's dealing with and I think they basically retrenched into its core positions of being a power utility retail provider. So that being said, what other deals are you seeing in the space that have caught your attention over the past year that either has or is changing market share positions in the landscape?
[00:33:10] Speaker A: Sure. So as well as the new market entrants that we just discussed, there's also been pretty big moves from well established players looking to make big moves. So Nexus Water Group, for example, this utility just recently downsized in eight states to focus on a more concentrated growth strategy, particularly in their Texas operational service area. And as we mentioned before, the state has relatively favorable regulatory policies as well as a large addressable market.
So such a big, such a large scale market like, you know, does present vast opportunity.
[00:33:51] Speaker B: Yeah, I think Nexus, and just for everybody, I mean it's a relatively new name over the past couple years. It's the combination of Southwest Water and Corex. So when those two companies merged, came together, they had a pretty significant geographic footprint. So this is not surprising. Post acquisition that they have decided to sort of divest some of their positions. And so they've done that by. I think you've put out some research on this, really. Probably when you look at it on paper at least, the most attractive suitor for those eight states was American water. They overlaid geographically with where American water is already located.
They were more likely to do it because, to use it as a starting point, back to my point about private equity, you know, it's, it's, it's tough sledding even to secure an anchor platform position if they're spread out over eight states.
You know, we have the analysis on that. The, it's, it's, it's hard to do, you know, as far as economies of scale and such.
Any others on your list that you've seen?
[00:35:07] Speaker A: Yeah. So I would also just lastly like to remark upon certain diversified utilities, perhaps like doubling down on other areas and aspects of their operations. So epcor, for example, they recently divested their natural gas utility in Texas. And EPCOR is emphasizing that they want to focus more on the US Water sector.
So I think they're an interesting utility to watch out for, particularly because they're in Arizona. And, and as we previously discussed earlier within this episode that this is like, you know, a state that's experiencing rapid population growth, it's experiencing rapid business and industrial growth so noticeably. And also the Arizona Regulatory Commission has also emphasized that there is a great need for consolidation within the state. So the state regulatory agency is, you know, pro consolidation and is actively looking to encourage such deals. So for EPCOR being in this state, and I think they're also in New Mexico and they have a certain pipeline presence in Texas as well. I think they're certainly interesting to look out for in the future.
[00:36:19] Speaker B: You're not even talking about the most interesting part. They're out of Edmonton.
[00:36:23] Speaker A: That's true.
[00:36:23] Speaker B: They're Canada based. And so the Canadians are active in the US Utility space.
That's always been the case. I think it's really interesting. It's an interesting model and approach that they're taking. So that's one thing I do like about epcore.
Like I said, different approach, different angle. So the competitive landscape as a whole, we've talked about it a couple different things here. We've talked about established firms from the start about American Water, Essential Utilities, their share of the space. We've talked about the role of private equity firms, whether it be JW holdings or Science Water.
They're interesting. We've talked about new market entrants so unitil we've talked. You just talked about ePCore, you know, Edmonton based and what they're up to. So I think there's a. There are definitely some interesting dynamics happening within, within this space and it's when within the broader context of there needs to be consolidation, whatever you want to call it, it doesn't matter whether it's from IOUs, whether it's from munis rolling up adjacent systems into their networks and those come with their own challenges. Right. Who's going to pay for that? Why is the larger, maybe more financially stable system, why would they want to acquire or roll up a struggling system and have to pay for that? Who's going to do that? So it's not as if it doesn't come without cost no matter what. So this is something in Bluefield we're definitely interested in.
So pick your poison. Right. There's a portfolio or there are a number of tools to mix metaphors, number of tools in the tool belt, IOUs, CO ops, munis who are quasi public. You mentioned the one in Connecticut buying up eversource's assets. Lots of interesting dynamics that Megan, you know a lot about. So thanks for sharing all of this. But before I let you go, give us an idea what else you're working on.
[00:38:26] Speaker A: Sure.
So currently I'm looking at water reuse across the country. So this includes direct and indirect potable applications and end uses. So I'm particularly focused on municipal water reuse. So that's something to look up, look out for in the upcoming months.
[00:38:45] Speaker B: Yeah, that's a topic that we've been looking at for a long time. It's evolved over time and as expected, when we started the company in 2013, that reuse was the wave of the future.
It's less expensive than desal, it treats water or leverages water that's already being treated in many cases.
And so there are a number, whether it be on the municipal side, which is like you said you're focused on, but also on the industrial side. You know, we talked a little bit a couple weeks ago, maybe a month ago with our colleague Amber Walsh and the role of reuse for things like data centers, you know, places like Loudoun County, Virginia. What's happening there in terms of all of. What do they call it? Data Center Alley, I think is what they're calling that. It's definitely a hot spot, but there's a lot of reuse and some interesting approaches to that. So. Super interesting. Caught you on a Friday before the weekend, so I'll set You free to go play tennis and hopefully enjoy a nice weekend.
And then the listeners learn more next time we talk about who won or lost your tennis match. But that being said, Megan, thanks a million for jumping on the Future Water podcast. We'll talk again soon.
[00:40:04] Speaker A: Yeah, thanks for having me on today, Rhys.
[00:40:06] Speaker B: All right, take care. Cheers.
All right, that's, that's it for today's breakdown. I appreciate Megan coming on. It's an interesting subject.
Contentious in many cases, as we talked about, you know, we used to call our Insight service in which we collect all the data. The M and A also includes our O and M contract analysis, contract operations.
We, we've changed the name from Private Water, which was even internally contentious, which not everybody liked because it was, I don't know, maybe put out the wrong message, but we've changed it to US Utility Ownership and Strategies. What that does is it allows us to at least showcase more broadly what we're looking at in the broader challenge of a fragmented utility landscape. And how are utilities, public or private, addressing this landscape? Are they.
They're acquiring and they're regionalizing or what's the role of co ops and so on. So if you have questions about this, you can always reach out to water
[email protected] I know Megan will be happy to answer the question, but so will other colleagues like Charlie Seuss and myself. Always happy to have a conversation about this. We've been looking at this space, particularly the IOUs, since I think 2013, 2014 was one of the first things we did to better understand what was happening. So if you want more intel, head over to bluefieldresearch.com and you can learn more without even reaching out to us. So I am Reece Tisdall and I'll catch you next time as we keep watching the water sector one signal at a time. So thanks for being part of the journey and before we sign off, and I don't say it enough, I want to thank all the people involved in making this and all other conversations happen.
These include Mike Gaylor, who's producing this podcast with the editorial side of the equation, Ryan Sullivan, Kelly Talbot, Steph Alldock. If it weren't for all these people, I'd be talking myself if it weren't for them.
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[email protected] until we talk again. Be well, be safe, and take care.
