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Utility Regulation

            A public utility is an industry that is required by law to provide adequate service in its field at reasonable prices to consumers who apply for it. Public utilities frequently operate as monopolies in their market. In the United States, public utilities are most commonly involved in the business of supplying consumers with water, electricity, telephone, natural gas, and other necessary services. Industries such as these are said to be "affected with a public interest" and therefore are subject to a certain degree of government regulation from which other businesses are exempt. .
             Opinions differ as to the characteristics that define an industry as a public utility, since all industries, in a sense, serve the public. A public utility is frequently monopolistic in nature and often is not prevented by competing companies from charging excessive prices. A public utility usually operates under a license or franchise that allows special privileges, such as the right of eminent domain. A public utility usually supplies an essential service, such as water, electricity, or natural gas. The unavailability of the service would seriously affect public health and welfare. It is important to have regulation over essential utilities that fulfill the vital needs of large populations. These would include: water, gas, and electric companies; transportations facilities, such as railroads, subways, and bus lines; and communication facilities, such as telephones and telegraphs. In many European countries, most of the public utilities are owned by the state. However, in t!.
             he United States, many public utilities are privately owned. .
             Public utility rates and standards of service are established by direct legislation and are administered by state regulatory commissions, usually called Public Service Commissions (PSC), and by such federal agencies as the Federal Energy Regulatory Commission (FERC), the Securities and Exchange Commission (SEC), and the Federal Communications Commission (FCC).

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