Environmental Engineering Reference
In-Depth Information
Utilities
More than just the names on the
bills
You're more likely to be in regular contact with the utility company
that provides your gas and electricity than you are with your local
petrol station, because there are more householders needing heat
and light than there are car owners needing fuel.
The usefulness of the expression “utility” is that it covers electricity and
gas as well as other basics. It's the most politically sensitive part of the
energy industry, because it touches every voter. It's also the one part of
the industry that requires some regulation by the public authorities to
ensure that energy users are free to choose suppliers, or if they are not
free to choose, at least to ensure that they are not ripped off by monopoly
energy suppliers.
Even where there is competition at the retail level in utility sales, the
electricity or gas still has to be transported from the power station or the
gas field via high-voltage wires or high-pressure gas pipes. Because there
is not enough space for competing grids, there can only be one set of wires
or pipes along a given route, and this constitutes a natural monopoly. And
there needs to be a regulator to ensure that this monopoly is not abused.
In contrast to the oil industry - which, because of foreign concessions,
was international from the very start - the energy utilities, at least in
electricity, had local beginnings. They had often started life as local pri-
vate enterprises, but after the widespread destruction of World War II in
Europe and Japan, they were nationalized by governments keen to plan
and accelerate economic reconstruction.
Among industrialized countries, only the US maintained the predomi-
nant model of private investor-owned utilities - and even there the federal
government went into the energy business in the 1930s Depression by cre-
ating the Tennessee Valley Authority, with hydroelectric dams to provide
power for poor farmers.
