A utility is a company that provides services to a community. In return for the exclusive right to serve a specified area, the company is regulated at the state level by a utility commission, who must approve utility rates and frequently investments in additional equipment. Utilities typically supply electricity, natural gas, sewer service, water, and telephone service--though other similar services may be similarly regulated.
Utilities are considered quasipublic companies. Whereas antitrust laws force most companies to engage in vigorous competition, the complexity of having multiple electric companies or multiple phone companies caused an exception in the case of utilites. The development of regulated utilities was a practical solultion in the special case of those services.
Recent Mentions on Fool.com
- Will Second-Quarter Earnings Launch Colgate-Palmolive to New All-Time Highs?
- This Utility Has a Secret Weapon
- More Red Ink at Arch Coal and Alpha Natural Resources
- Why Organovo Holdings Inc Stock Bulked Up Today
- Is Apple About to Cannibalize the iPad?
- CIT Group Inc: A Host of Tailwinds Could Fuel Big Valuation Growth