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Utility Regulation

Utility Regulation

A public utility is an industry that is required by law to provide adequate service in its field at reasonable prices to consumers who apply for it. Public utilities frequently operate as monopolies in their market. In the United States, public utilities are most commonly involved in the business of supplying consumers with water, electricity, telephone, natural gas, and other necessary services. Industries such as these are said to be “affected with a public interest” and therefore are subject to a certain degree of government regulation from which other businesses are exempt. 
	Opinions differ as to the characteristics that define an industry as a public utility, since all industries, in a sense, serve the public. A public utility is frequently monopolistic in nature and often is not prevented by competing companies from charging excessive prices. A public utility usually operates under a license or franchise that allows special privileges, such as the right of eminent domain. A public utility usually supplies an essential service, such as water, electricity, or natural gas. The unavailability of the service would seriously affect public health and welfare. It is important to have regulation over essential utilities that fulfill the vital needs of large populations.

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