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The Electric Industry: A Large Business Sector

The electric power industry is a robust, $365-billion industry that employs nearly 400,000 American workers. In our nation’s economy, the industry represents 3 percent of real GDP.

More than 70 percent of U.S. electricity customers are served by shareholder-owned electric companies.

Click to View and Print PDFThese companies are highly regulated and are financed by the sale of stocks and bonds to the general public. These companies also are a significant source of tax revenue for state and local governments.

From a financial perspective, shareholder-owned electric companies rely heavily on the private sector for investment capital needed to finance their operations. They also raise money by issuing stocks.

Traditionally, millions of Americans have relied on the modest, steady growth of utility stocks to supplement their retirement income. Today the electric power sector continues to pay out one of the highest percentage of earnings through dividends of any U.S. business sector, with a dividend payout ratio of 66.6 percent for the 12-month period that ended September 30, 2008.

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