Term: Electric Utility

Electric Utility

An electric utility is a person, agency, or other legal entity aligned with distribution facilities for the purpose of delivering electricity to the public. The utility is also referred to as Transmission and Distribution Service Providers (TDSPs) or Electric Distribution Utilities (EDUs).

Responsibilities of the Electric Utility

The utility is responsible for the transmission of electricity from the generation site and the delivery of the electricity to your home or business.  They own the required infrastructure such as the utility poles and power lines and are responsible for keeping the equipment in good working order. Additionally, the utility is whom customers call when the power goes out or for other customer service issues and billing.

How Deregulation Affected Utilities

Prior to deregulation customers purchased their energy directly from the utility. Following deregulation, customers were offered the opportunity to shop for an energy provider with the intention of lowering overall prices by increasing competition. In some states, customers can choose to remain with the utility. In a deregulated state utilities are prohibited from generation and transmission ownership, however, their parent company may own and operate facilities that generate electricity. This means that it is possible for utilities to purchase electricity from their own power plants or from other wholesale electricity sources.

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