Days Payable Outstanding: a five-year read on US utility discipline
We benchmarked DPO across eight large-cap US utilities from FY2020 to FY2024 to trace how the sector re-based payment terms through a higher-rate cycle — and to size the working capital that discipline moved.
The peer set
Eight regulated large-cap utilities with comparable capital intensity, benchmarked as a group to read sector-wide behaviour rather than any single company.
1. Five-year DPO trend
The peer average drifts up from roughly 50 to 58 days as the field extends payment terms through the higher-rate cycle. A leading tier pulls clear of the pack after FY22.
Days Payable Outstanding by issuer, FY2020–FY2024 (days)
The sector as a whole extended payment terms over the window — an expected response to a higher-rate environment. The spread widened too: the gap between the best and worst issuer grew from 31 to 52 days, signalling that discipline, not sector tailwind, separated the leaders from the field.
2. Where the movement happened
Comparing the first and last year isolates who actually changed behaviour. A handful of issuers re-based materially higher, while two of the eight ended the window with fewer payable days than they started.
FY2020 vs FY2024 DPO by issuer (days)
Movement is concentrated: most of the sector-wide rise came from the top two or three issuers extending terms, not a uniform drift. In a period when the field lengthened its payment cycle, standing still was itself a relative give-back of roughly a week of payables.
3. Translating days into dollars
Applying each issuer's daily COGS to its DPO gap versus the peer average converts the benchmark into cash. Positive bars financed operations with supplier credit; negative bars funded suppliers early.
Cumulative excess accounts payable vs peer average, FY2020–FY2024 ($M)
The leading issuer unlocked roughly $1.8B of cumulative supplier financing simply by holding a longer, disciplined payment cycle. At the other end, below-average issuers effectively funded suppliers early — a recoverable gap for most, not a structural one.
Method & caveats
How the numbers were built, and where to treat them with care.
DPO is calculated as period-end accounts payable divided by cost of goods sold, multiplied by days in period. Excess AP applies each issuer's daily COGS to its DPO gap versus the peer-average DPO for the same year, then sums across FY2020–FY2024.
Figures are drawn from reported annual filings and normalised for fiscal-year alignment. Utilities differ in fuel mix and regulatory construct, so cross-issuer comparisons indicate direction and magnitude rather than precise like-for-like.
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