Utilities

A public utility is a company that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities often involve natural monopolies, and as a result are often government monopolies, or if privately owned, treated as specially regulated sectors.
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. Unlike public companies, private utilities may be listed on the stock exchange. Private, in this context, means not owned by the public or the government.
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. However, 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.
- An electric utility, which in some instances can be electric power transmission or electricity distribution organizations.
- Drinking water purification and distribution.
- Sewage treatment and disposal.
- Other waste disposal.
- Natural gas distribution.
- District heat generation and distribution.
- Public transport.
- Telecommunications, such as cable television and telephone lines.
- Roads, including toll ways.
- 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. However, the network infrastructure used to distribute most utility products and services has remained largely natural monopolistic.
Improving shareholder value in an uncertain regulatory and tough economic environment is a key challenge for the industry. Capital budgets are severely curtailed in many companies. As individual organizations look to the future, issues range from one company to another. While some face an aging workforce or aging infrastructure, others have to address varying regulation and deregulation scenarios.
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