The utility services sector is at an inflection point, driven by surging energy demand, deteriorating infrastructure, and continued fiber deployment. According to BaseRock Partners Utility Services Market Report 2025, major outlays are expected across transmission and distribution networks, water systems, and broadband infrastructure. With a median 17% increase in CapEx among utilities and a growing backlog of infrastructure projects, industry players must stay informed to seize opportunities in the evolving landscape.
Surging Energy Demand and Grid Modernization
Following decades of flat growth, U.S. power demand is set to rise sharply, propelled by energy-intensive industries such as data centers. By 2030, data centers are projected to consume 12% of total U.S. electricity, significantly impacting grid infrastructure (BaseRock Partners Utility Services Market Report 2025).
In response, utilities are ramping up investments to modernize transmission and distribution networks, ensuring grid reliability amid rising demand. The report notes that
“major utilities are expected to increase capital expenditures by a median of 17% in the coming years.”
This capital allocation will prioritize system resilience, capacity expansion, and the integration of renewable energy sources.
Addressing America’s Aging Water Infrastructure
With more than 40% of U.S. drinking water infrastructure surpassing the 50-year mark, the need for investment is urgent. Outdated wastewater and stormwater systems are under increased pressure from more frequent and severe storms. “Frequent and intense storm events are straining outdated wastewater and stormwater systems, highlighting the need for resilience,” the report states.
Compounding these challenges is a workforce shortage in the water utility sector. “33% of utility operators can retire in 10 years, with only 10% under the age of 24,” creating a significant knowledge gap and potential delays in necessary infrastructure upgrades. Investments in workforce development, technology, and system resilience will be critical to ensuring long-term water security.
Fiber Expansion Faces Administrative Delays but Continues
The broadband industry remains on a strong growth trajectory, with fiber passing more than half of U.S. homes. By 2029, this figure is expected to exceed 90% of passable homes, with three key providers driving 75% of new passings (BaseRock Partners Utility Services Market Report 2025).
Despite this momentum, the report highlights a temporary slowdown: “An executive order issued in January has suspended the disbursement of BEAD funding as the new administration reviews the program.” While the extent of the impact remains uncertain, the near-term outlook for fiber remains strong, driven by private sector investment and state-level broadband initiatives.
Private Equity Fuels M&A Activity in Utility Services
Private equity firms remain highly active in the utility services sector, with significant transactions reshaping the competitive landscape. Some of the most notable deals include:
- • Roark Capital’s partnership with GPRS (January 2025)
- • Cerberus’ acquisition of Landmark Structures (December 2024)
- • GridTek Utility Services’ sale from First Reserve to BlackRock (June 2024)
The report underscores that “Wall Street analysts expect a repeat of 2024 in 2025, with anticipated near-double-digit top-line growth and expanding backlogs.” For commentary on these sector trends and more, download the full BaseRock Partners Utility Services Market Report 2025.
Contact BaseRock Partners
