Dive Brief:

• Mergers and acquisition activity in the U.S. electric utility industry shows no signs of abating in the next few years, according to Moody's Investors Service. 
• Utilities near the end of a capital spending cycle will look to diversify and expand their regulated asset base, the credit ratings agency said, and large utilities experiencing slower load growth will also look beyond their service territories for assets. Among those more able to do so are Exelon, Duke Energy and MidAmerican Energy Holdings, Moody's said.
• Small utilities that could be the target of a takeover include Vectren Utility Holdings, Cleco Power, Empire District Electric and UNS Energy, Moody's said.

Dive Insight: 

Expanding regulated businesses and diversifying operations are a hedge for utilities experiencing slower load growth because of increased customer conservation and efficiency as well moves to distributed generation. Mergers will allow utilities that are seeing lower returns on equity achieve savings through the operational synergies produced by a merger.