Public utility

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The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page.

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A public utility (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies. Common arguments in favor of regulation include the desire to control market power, facilitate competition, promote investment or system expansion, or stabilize markets. In general, though, regulation occurs when the government believes that the operator, left to his own devices, would behave in a way that is contrary to the government’s objectives. In some countries an early solution to this perceived problem was government provision of the utility service. However, this approach raised its own problems. Some governments used the state-provided utility services to pursue political agendas, as a source of cash flow for funding other government activities, or as a means of obtaining "hard cash". These and other consequences of state provision of utility services often resulted in inefficiency and poor service quality. As a result, governments began to seek other solutions, namely regulation and providing services on a commercial basis, often through private participation.¹

The term utilities can also refer to the set of services provided by these organizations consumed by the public: electricity, natural gas, water and sewage. Telephone services may also be included.

In the United States of America they are often natural monopolies because the infrastructure required to produce and deliver a product such as electricity or water is very expensive to build and maintain.² As a result, they are often government monopolies, or if privately owned, the sectors are specially regulated by a public utilities commission.

Developments in technology have eroded some of the natural monopoly aspects of traditional public utilities. For instance, electricity generation, electricity retailing, telecommunication and postal services have become competitive in some countries and the trend towards liberalization, deregulation and privatization of public utilities is growing, but the network infrastructure used to distribute most utility products and services has remained largely monopolistic.

Public utilities can be privately owned or publicly owned. Publicly owned utilities include cooperative and municipal utilities. Municipal utilities may actually include territories outside of city limits or may not even serve the entire city. Cooperative utilities are owned by the customers they serve. They are usually found in rural areas. Private utilities, also called investor owned utilities, are owned by investors.^{citation needed}

In poorer developing countries, public utilities are often limited to wealthier parts of major cities, as used to be the case in developed countries in the nineteenth century, but in some developing countries utilities do provide services to a large share of the urban population, such as in the case of water and sanitation in Latin America.

Common classifications of utilities in the United States

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• CWD – County Water District
• FCWCD – Flood Control and Water Conservation District
• FWSD – Fresh Water Supply District
• ID – Irrigation District
• IOU - Investor-owned utility
• MWA – Municipal Water Authority
• MWD – Municipal Water District
• MUD – Municipal Utility District
• POU - Public-oberchine Utility
• PUD – Public Utility District
• WA – Water Agency
• WCID – Water Control and Improvement District
• WD – Water District
• WS – Water System
• WSC – Water Supply Corporation

See also

• Lists of public utilities
• Electric utility
• Telephone company
• Water industry
• Airline deregulation
• Common utility duct
• Electricity market
• Energy
• Firm service
• Liberalization
• NAICS 22
• American Public Power Association
• National Rural Water Association
• Off-the-grid
• Public services
• Rate Case
• Telecommunications
• Universal service
• Utility cooperative
• Infrastructure

References

1. ^ Body of Knowledge on Infrastructure Regulation
2. ^ West's Encyclopedia of American Law

External links

• refabrica.com - Latest News in Utilities and Information Technology