What Are Public Utilities in the US?
There are three primary types of public utilities in the US. These are investor-owned utilities, cooperative utilities, and public power utilities. Public power utilities serve one in seven people and more than 2,000 communities. They are cheaper for residential customers than investor-owned utilities and offer more reliable electric service.
Electricity
Electricity was first distributed by Edison’s Edison Illuminating Company in Lower Manhattan in 1882. At the time, most people in the US had to rely on generators to power their homes. With the development of new technologies, the power industry grew steadily and was able to offer lower prices. From 1947 to 1973, the electric power industry grew at an average rate of 8% per year. By the end of the century, the industry was able to consolidate smaller electric distribution companies into larger ones.
Public utilities are owned by communities and run as divisions of local governments. They are governed by the city council or an elected board of directors. This means that community citizens have a voice in the decisions that affect their utility.
Gas
In the US, public utilities are companies that provide certain classes of services to the general public. These services range from common carrier transportation (airlines, trains, and buses) to electricity, gas, water, and waste removal. Depending on the specific utility, these activities can be quite varied, but they generally include such activities as electric power generation and distribution, steam supply, and water supply and sanitation.
Publicly owned utilities may be federal, state, or municipal-based. They can also be operated by a political subdivision. In the US, there are more than 1,950 POUs, and each one serves a small percentage of the population. The average utility has 12,100 electricity customers. However, utilities serving a large population may be much larger. For example, the Los Angeles Department of Water and Power serves about 1.43 million people.
Water
Public utilities are companies that provide certain classes of services to the public. Common examples are transportation (airlines and buses), pipelines, telephone, telegraph, and power, heat, and water. They can also provide community facilities like sanitation. While public utilities are typically privately owned and operated, they are also subject to government regulation and control.
Utilities are regulated by state and federal agencies to ensure fair and equitable service to their customers. As a result, they are expected to maintain reliable service while lowering rates. However, critics say that public utilities haven’t acted quickly enough to implement renewables and progressive policies.
Co-ops
Electric co-ops are nonprofit organizations owned and operated by their members. The federal government has ratified this model of providing electricity to rural areas in the US. Cooperatives focus on customer service rather than profits. They award capital credits to members based on their consumption, a concept known as patronage. The members pay an initial registration fee and provide continuous capital through their purchases of electricity.
Electric co-ops are still a strong force in the US. The Tri-State Generation and Transmission Association, for example, represents more than 900 cooperatives in the US, providing electricity to over half the country. Consumer-members of co-ops have a say in the policy-making process, and board members are elected by their co-op members. These cooperatives also partner with small businesses and other nonprofits to create a more sustainable power source.
