Major US utilities maintained spending with diverse suppliers in 2025 despite a changing political landscape and uncertainty surrounding diversity, equity, and inclusion initiatives, Wood Mackenzie strategists said in a note on Wednesday.
Angela Cosme, data associate in Supply Chain Market Intelligence at Wood Mackenzie, said that diverse suppliers accounted for an average of 12.5% of sourceable supply chain spending across major US utilities in 2025, unchanged from the previous year.
California utilities continued to lead the sector, with diverse suppliers representing an average of 26.1% of procurement spending, while utilities outside California averaged 8.8%, both broadly in line with 2024 levels.
The report comes as utilities across the US reassess DEI-related programs following President Trump's January 2025 executive orders that created uncertainty about diversity initiatives in the private sector.
The consultancy said utility procurement practices have been less affected than those in other industries because utilities operate primarily under state-level regulatory frameworks that continue to support supplier diversity programs.
Cosme said state regulations remain a key driver of supplier diversity performance, citing California's General Order 156, which requires utilities to track and report spending with diverse suppliers.
Wood Mackenzie said similar requirements remain in place in states including New York and Illinois.
The consultancy said many utilities also entered 2025 with supplier diversity targets and procurement budgets already established, helping sustain spending levels throughout the year.
California utilities maintained diverse supplier spending between 25% and 28% during the year, while utilities outside the state remained in the 8% to 10% range. Both groups experienced modest declines in Q4, which Wood Mackenzie attributed to year-end procurement patterns that tend to favor larger contracts awarded to non-diverse suppliers.
The gap between California and non-California utilities remained largely unchanged, reflecting differences in regulatory requirements and procurement practices.
Though overall spending with diverse suppliers remained stable, the number of diverse suppliers participating in utility supply chains declined by 2.2% during the year.
Wood Mackenzie said this suggests utilities are concentrating spending among established suppliers with proven capabilities rather than expanding the number of suppliers they engage.
Construction, engineering, and technical services, industrial services, and maintenance remained the largest categories for both overall and diverse-supplier spending, offering the greatest opportunities to increase participation by diverse businesses.
Going forward, the consultancy projected that supplier diversity spending would remain steady through 2026. The ongoing investments in grid modernization, battery storage, electric vehicle charging infrastructure and digital grid technologies are creating new procurement opportunities for diverse suppliers.