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The Electric Industry: A Large Business Sector

Gross Output of Key IndustriesThe electric power industry is a robust, $298-billion-plus industry that employs more than 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 Percentage of Customers Served By Each Type of Providerare served by shareholder-owned electric companies.

These 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 a higher percentage of its earnings through dividends than any other U.S. business sector, with a dividend payout ratio of 63.2 percent for the 12-month period that ended on September 30, 2007.

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