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
- SnapChat's New Cash Transfer App Won't Undermine Apple Pay
- The Simple Way I Search for the Next Hit Stock
- 3 Things Archer Daniels Midland Company Wants You to Know
- Will Apple, Inc. Abandon Its Sapphire Dreams And Use Corning's Gorilla Glass 4?
- 7 Ways to Boost Your Credit Score This Month
- Major Cable CEO: We're Preparing for Cord-Cutting