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Utilities are those companies that build and maintain the infrastructure needed to provide electricity, gas, and water, or to manage wastewater and sewage; they also provide the related service that utilizes that infrastructure. Utility services are fundamental to modern society.
Across the globe, energy is generated or produced every second of the day, and it is the work of energy utility companies to distribute it in the form of electricity to homes and businesses. Most utility companies provide either electric power or natural gas for heating and cooking although some provide both. Many companies generate the power, as well as distribute it. Some companies act as brokers and sell energy produced by one company to another company or a large manufacturing client. The utility industry’s primary goal is to meet the power and energy demands of their clients, anticipate the highs and lows of demand, and to provide energy as efficiently and affordably as possible. Water and sewage utilities are responsible for providing a clean source of water to residences as well as commercial and industrial structures and for removing and treating sewage and wastewater.
In addition to attaining these overarching goals, utilities must also provide customer service. Customers who move to a new home or apartment must close their utility accounts at one address and open a new account for the new home. Some customers may move out of the service territory, build a new home that has no power or water lines already available, have questions about their bills or want to make payment arrangements, or need conservation tips and advice. Utility companies provide all these services. In addition, they are responsible for restoring service in the event of an outage if severe weather or an accident damages power, gas, or water lines. Gas utilities are responsible for inspecting gas lines and ensuring their safety. Utility companies also build new services and must replace existing poles and lines when they wear out. It is a lot of work, and it takes thousands of employees working in offices and in the field to keep the utility industry running smoothly.
In general, there are three types of utility companies: for-profit companies, city-owned companies, and rural cooperatives. When it comes to natural gas, there are fewer city- or public-owned utility companies. Most gas companies are for-profit. Rural electric cooperatives provide electric service to large rural regions that are often outside the service area of a city’s or for-profit market. Most water utilities are overseen or operated by local governments.
Utility companies are regulated by local Public Utility Commissions (PUC). These local agencies serve as buffers between consumers and utility companies. Public Utility Commissions developed when large utility companies formed essentially as monopolies. As an electric utility company offered service to a city, for example, it built the infrastructure to serve those clients, and it was impractical for a competing company to set up electric poles next to existing ones. This kept competition out of the market, and there was nothing to prevent these companies from charging as much as they pleased for electricity. PUCs formed to regulate them. For instance, in order to hike rates, a utility company must apply to their state-owned PUC for approval and justify the increase. The PUCs also regulate other utility operations policies, such as when a company may turn off a delinquent customer’s power. In most U.S. cities that experience freezing temperatures in the winter, if the temperature slips below a specified temperature (usually 20 degrees Fahrenheit), disconnections are not allowed. In the 1990s, governments sought to begin deregulating the utility industry, but PUCs and most of their regulations are still in place.
People began heating their homes with coal or gas in the 1700s. However, commercial businesses did not begin to play a large role in providing these resources until Thomas Edison discovered the light bulb, and subsequently built a power plant to distribute electricity in the 1880s. Over the next forty years, electricity became common to every household and business. At the same time, natural gas became the most popular choice for heating and cooking, because of its low cost and “cleanness” compared with coal. Clean water supplies and hygienic treatment of sewage remained a major challenge until the 19th century when the roots of modern plumbing and water systems were laid.
Despite the fact that many utility companies do not compete directly for business, they are still required to offer quality service, provide uninterrupted service the majority of the time, and often, also provide conservation information to consumers. The primary workers in the utility industry are engineers, project planners or managers, compliance or regulatory officers, and construction crews (line crews), operators, field service crew, managers, meter readers, and customer service representatives.
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