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
- At Long Last, Amazon.com Commits to Going Green
- Nokia to Microsoft: Thanks for $7.2 Billion; We're Going to China With Android Now
- Who Doesn't Have to Pay the Obamacare Penalty?
- How SolarCity and SunPower Plan to Dominate Solar
- Why Apple Is a Great Dividend Stock to Buy
- Google Fiber Delivers Another Blow To Cable