Utility Knowledge

Through out the world, electric utilities may be publicly owned, investor owned, private or nationalised. Public power utilities are those which are owned and operated by non-profit organisations like local municipalities , state governments or other public bodies. Private electric suppliers often have captive power plants to meet their own electricity needs, especially when supplies from public or government utilities is erratic.

Unlike investor owned electric utilities which are listed in the stock exchanges and accountable to their shareholders, public power supply companies operate on a no profit , no loss basis. So the rates that public power companies offer both to domestic and commercial electricity users are often lower than that of investor owned services. However many of these companies are small, and only distribute the power they purchase.

In countries where transmission and distribution losses are high and power theft is not checked, many public power companies may prefer to subcontract the distribution of power and collection of payments to private companies. This may be because the public companies are influenced by local government functionaries , which reduces their efficiency.

Though many parts of the world , especially in developing countries manage to survive without it, electricity is an essential utility in the developed Western countries. Lack of electricity causes inconvenience to households, since most home appliances run on electricity, and also to most businesses and factories where most equipment is powered by electricity.

The electricity is supplied to residential and commercial premises in an area by the electric utility for the area. The electric utility will transmit and distribute electric supply for the area, though many electric utilities also generate their own electric supply at their power stations. Small electric utilities may not have their own power generation plants but may purchase electricity at wholesale rates from power producers with surplus power.

It is usually cheaper for an electric utility to purchase power from a producer close to the distribution area, since the transmission losses are lower for shorter distances. However, the cost of power will also depend on the method used for generating electricity and may be higher if fuel prices are higher.

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