are determined by the city or community leaders along with state regulation. Business decisions regarding operations, electric rates, expansion, etc. There are about 2000 municipal utilities in the United States 2. They can serve large territories like Los Angeles, CA, and Austin, TX, or smaller ones such as Brownsville, TX, and Cedar Falls, IA. Municipal Utilities are owned and operated by the cities, communities, and territories they provide electric service to. However, IOUs sell electricity to about 72% of people in the country 2. Energy Information Organization, there are only 168 IOUs in the United States from a total of around 3000 utilities, as of 2017. Because they are for-profit organizations enabled by a monopoly, IOUs electricity rates (prices) are tightly regulated by the government, along with state and local authorities. Service territory monopolies were proposed over 100 years ago by industry leaders along with the government to encourage companies to invest in the creation of an electric grid 1. Utilities that are vertically integrated are said to have a monopoly (no competition) in their service territory. IOUs are said to be vertically integrated, meaning they may own all, or most, of their functions (generation, transmission, distribution, and retail sales). They are for profit companies with the purpose of generating revenue for their owners just like a regular business. Utilities owned by a group of shareholders and that are publicly traded are aptly called Investor-Owned Utilities (IOU). Join me in this journey to learn more about Electric Utilities. Those two won’t be covered, so you should Google search those terms for more info. However, around the world there are also National and State-Owned utilities, among other business structures as well. We will discuss the 3 main business structures: Investor-Owned Utilities (IOU), Municipal Utilities, and Cooperatives. Very good questions, and for that, we first must talk about the utilities’ business structures. “How does a utility make money? Is it only through electricity sales? And what is their business model? More importantly, if there is no competition, how do we know the electric rates we pay are fair?” We proactively take measures to protect our customers from rising fuel costs while reliably providing power as economically as possible.While we are beginning to understand what an electric utility is and of its four main functions, a few thoughts arise: We are investing in infrastructure to ensure a more resilient power grid, creating a balanced energy mix and installing high-speed electric vehicle charging stations across the state, all while keeping your bill well below the national average.
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