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class="firstHeading mw-first-heading"><span class="mw-page-title-main">Electric utility</span></h1> <div id="p-lang-btn" class="vector-dropdown mw-portlet mw-portlet-lang" > <input type="checkbox" id="p-lang-btn-checkbox" role="button" aria-haspopup="true" data-event-name="ui.dropdown-p-lang-btn" class="vector-dropdown-checkbox mw-interlanguage-selector" aria-label="Go to an article in another language. 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class="interlanguage-link interwiki-da mw-list-item"><a href="https://da.wikipedia.org/wiki/Elselskab" title="Elselskab – Danish" lang="da" hreflang="da" data-title="Elselskab" data-language-autonym="Dansk" data-language-local-name="Danish" class="interlanguage-link-target"><span>Dansk</span></a></li><li class="interlanguage-link interwiki-de mw-list-item"><a href="https://de.wikipedia.org/wiki/Elektrizit%C3%A4tsversorgungsunternehmen" title="Elektrizitätsversorgungsunternehmen – German" lang="de" hreflang="de" data-title="Elektrizitätsversorgungsunternehmen" data-language-autonym="Deutsch" data-language-local-name="German" class="interlanguage-link-target"><span>Deutsch</span></a></li><li class="interlanguage-link interwiki-fa mw-list-item"><a href="https://fa.wikipedia.org/wiki/%D8%AE%D8%AF%D9%85%D8%A7%D8%AA_%D8%A8%D8%B1%D9%82" title="خدمات برق – Persian" lang="fa" hreflang="fa" data-title="خدمات برق" data-language-autonym="فارسی" data-language-local-name="Persian" class="interlanguage-link-target"><span>فارسی</span></a></li><li class="interlanguage-link interwiki-fr mw-list-item"><a href="https://fr.wikipedia.org/wiki/Fournisseur_d%27%C3%A9lectricit%C3%A9_(France)" title="Fournisseur d'électricité (France) – French" lang="fr" hreflang="fr" data-title="Fournisseur d'électricité (France)" data-language-autonym="Français" data-language-local-name="French" class="interlanguage-link-target"><span>Français</span></a></li><li class="interlanguage-link interwiki-id mw-list-item"><a href="https://id.wikipedia.org/wiki/Penyedia_listrik" title="Penyedia listrik – Indonesian" lang="id" hreflang="id" data-title="Penyedia listrik" data-language-autonym="Bahasa Indonesia" data-language-local-name="Indonesian" class="interlanguage-link-target"><span>Bahasa Indonesia</span></a></li><li class="interlanguage-link interwiki-ms mw-list-item"><a href="https://ms.wikipedia.org/wiki/Utiliti_elektrik" title="Utiliti elektrik – Malay" lang="ms" hreflang="ms" 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class="mw-content-ltr mw-parser-output" lang="en" dir="ltr"><div class="shortdescription nomobile noexcerpt noprint searchaux" style="display:none">Type of electric power company</div> <p>An <b>electric utility</b>, or a <b>power company</b>, is a company in the <a href="/wiki/Electric_power_industry" title="Electric power industry">electric power industry</a> (often a <a href="/wiki/Public_utility" title="Public utility">public utility</a>) that engages in <a href="/wiki/Electricity_generation" title="Electricity generation">electricity generation</a> and <a href="/wiki/Electricity_retailing" title="Electricity retailing">distribution of electricity</a> for sale generally in a <a href="/wiki/Regulated_market" title="Regulated market">regulated market</a>.<sup id="cite_ref-1" class="reference"><a href="#cite_note-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> The electrical utility industry is a major provider of energy in most countries. </p><p>Electric utilities include <a href="/wiki/Investor-owned_utility" class="mw-redirect" title="Investor-owned utility">investor owned</a>, <a href="/wiki/Public_ownership" class="mw-redirect" title="Public ownership">publicly owned</a>, <a href="/wiki/National_Rural_Electric_Cooperative_Association" title="National Rural Electric Cooperative Association">cooperatives</a>, and <a href="/wiki/Nationalized" class="mw-redirect" title="Nationalized">nationalized</a> entities. They may be engaged in all or only some aspects of the industry. <a href="/wiki/Electricity_market" title="Electricity market">Electricity markets</a> are also considered electric utilities—these entities buy and sell electricity, acting as brokers, but usually do not own or operate generation, transmission, or distribution facilities. Utilities are regulated by local and national authorities. </p><p>Electric utilities are facing increasing demands<sup id="cite_ref-one_2-0" class="reference"><a href="#cite_note-one-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> including <a href="/wiki/Electrical_grid#Aging_infrastructure" title="Electrical grid">aging infrastructure</a>, reliability, and regulation. </p><p>In 2009, the French company EDF was the world's largest producer of electricity.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Organization">Organization</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=1" title="Edit section: Organization"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="mw-heading mw-heading3"><h3 id="Power_transactions">Power transactions</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=2" title="Edit section: Power transactions"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>An <a href="/wiki/Electricity" title="Electricity">electric</a> power system is a group of generation, transmission, distribution, communication, and other facilities that are physically connected.<sup id="cite_ref-4" class="reference"><a href="#cite_note-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> The flow of electricity within the system is maintained and controlled by dispatch centers which can buy and sell electricity based on system requirements. </p> <div class="mw-heading mw-heading3"><h3 id="Executive_compensation">Executive compensation</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=3" title="Edit section: Executive compensation"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1251242444">.mw-parser-output .ambox{border:1px solid #a2a9b1;border-left:10px solid #36c;background-color:#fbfbfb;box-sizing:border-box}.mw-parser-output .ambox+link+.ambox,.mw-parser-output .ambox+link+style+.ambox,.mw-parser-output .ambox+link+link+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+style+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+link+.ambox{margin-top:-1px}html body.mediawiki .mw-parser-output .ambox.mbox-small-left{margin:4px 1em 4px 0;overflow:hidden;width:238px;border-collapse:collapse;font-size:88%;line-height:1.25em}.mw-parser-output .ambox-speedy{border-left:10px solid #b32424;background-color:#fee7e6}.mw-parser-output .ambox-delete{border-left:10px solid #b32424}.mw-parser-output .ambox-content{border-left:10px solid #f28500}.mw-parser-output .ambox-style{border-left:10px solid #fc3}.mw-parser-output .ambox-move{border-left:10px solid #9932cc}.mw-parser-output .ambox-protection{border-left:10px solid #a2a9b1}.mw-parser-output .ambox .mbox-text{border:none;padding:0.25em 0.5em;width:100%}.mw-parser-output .ambox .mbox-image{border:none;padding:2px 0 2px 0.5em;text-align:center}.mw-parser-output .ambox .mbox-imageright{border:none;padding:2px 0.5em 2px 0;text-align:center}.mw-parser-output .ambox .mbox-empty-cell{border:none;padding:0;width:1px}.mw-parser-output .ambox .mbox-image-div{width:52px}@media(min-width:720px){.mw-parser-output .ambox{margin:0 10%}}@media print{body.ns-0 .mw-parser-output .ambox{display:none!important}}</style><table class="box-Globalize plainlinks metadata ambox ambox-content ambox-globalize" role="presentation"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><span><img alt="Globe icon." src="//upload.wikimedia.org/wikipedia/commons/thumb/b/bd/Ambox_globe_content.svg/48px-Ambox_globe_content.svg.png" decoding="async" width="48" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/b/bd/Ambox_globe_content.svg/73px-Ambox_globe_content.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/b/bd/Ambox_globe_content.svg/97px-Ambox_globe_content.svg.png 2x" data-file-width="350" data-file-height="290" /></span></span></div></td><td class="mbox-text"><div class="mbox-text-span">The examples and perspective in this article <b>may not represent a <a href="/wiki/Wikipedia:WikiProject_Countering_systemic_bias" title="Wikipedia:WikiProject Countering systemic bias">worldwide view</a> of the subject</b>.<span class="hide-when-compact"> You may <a class="external text" href="https://en.wikipedia.org/w/index.php?title=Electric_utility&action=edit">improve this article</a>, discuss the issue on the <a href="/wiki/Talk:Electric_utility" title="Talk:Electric utility">talk page</a>, or <a href="/wiki/Wikipedia:Article_wizard" title="Wikipedia:Article wizard">create a new article</a>, as appropriate.</span> <span class="date-container"><i>(<span class="date">February 2016</span>)</i></span><span class="hide-when-compact"><i> (<small><a href="/wiki/Help:Maintenance_template_removal" title="Help:Maintenance template removal">Learn how and when to remove this message</a></small>)</i></span></div></td></tr></tbody></table> <p>The <a href="/wiki/Executive_compensation" title="Executive compensation">executive compensation</a> received by the executives in utility companies often receives the most scrutiny in the review of <a href="/wiki/Operating_expenses" class="mw-redirect" title="Operating expenses">operating expenses</a>. Just as regulated utilities and their governing bodies struggle to maintain a balance between keeping consumer costs reasonable and being profitable enough to attract investors, they must also compete with private companies for talented executives and then be able to retain those executives.<sup id="cite_ref-ReferenceA_5-0" class="reference"><a href="#cite_note-ReferenceA-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> </p><p>Regulated companies are less likely to use incentive-based <a href="/wiki/Remuneration" title="Remuneration">remuneration</a> in addition to base salaries. Executives in regulated electric utilities are less likely to be paid for their performance in bonuses or <a href="/wiki/Stock_options" class="mw-redirect" title="Stock options">stock options</a>.<sup id="cite_ref-ReferenceA_5-1" class="reference"><a href="#cite_note-ReferenceA-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> They are less likely to approve compensation policies that include incentive-based pay.<sup id="cite_ref-ReferenceA_5-2" class="reference"><a href="#cite_note-ReferenceA-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> The compensation for electric utility executives will be the lowest in regulated utilities that have an unfavorable regulatory environment. These companies have more political constraints than those in a favorable regulatory environment and are less likely to have a positive response to requests for rate increases.<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p><p>Just as increased constraints from regulation drive compensation down for executives in electric utilities, <a href="/wiki/Deregulation" title="Deregulation">deregulation</a> has been shown to increase remuneration. The need to encourage risk-taking behavior in seeking new investment opportunities while keeping costs under control requires deregulated companies to offer performance-based incentives to their executives. It has been found that increased compensation is also more likely to attract executives experienced in working in competitive environments.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> </p><p>In the United States, the <a href="/wiki/Energy_Policy_Act_of_1992" title="Energy Policy Act of 1992">Energy Policy Act of 1992</a> removed previous barriers to wholesale competition in the electric utility industry. Currently 24 states allow for deregulated electric utilities: Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Virginia, Arizona, Arkansas, California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Montana, New Hampshire, New Jersey, New Mexico, New York, and Washington D.C.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> As electric utility monopolies have been increasingly broken up into deregulated businesses, executive compensation has risen; particularly incentive compensation.<sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Oversight">Oversight</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=4" title="Edit section: Oversight"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Oversight is typically carried out at the national level, however it varies depending on financial support and external influences.<sup id="cite_ref-10" class="reference"><a href="#cite_note-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> There is no existence of any influential international energy oversight organization. There does exist a World Energy Council, but its mission is mostly to advise and share new information.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup> It does not hold any kind of legislative or executive power. </p> <div class="mw-heading mw-heading2"><h2 id="Alternative_energy_promotion">Alternative energy promotion</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=5" title="Edit section: Alternative energy promotion"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><a href="/wiki/Alternative_energy" class="mw-redirect" title="Alternative energy">Alternative energy</a> has become more and more prevalent in recent times and as it is inherently independent of more traditional sources of energy, the market seems to have a very different structure. In the United States, to promote the production and development of alternative energies, there are many subsidies, rewards, and incentives that encourage companies to take up the challenge themselves. There is precedent for such a system working in countries like Nicaragua. In 2005, Nicaragua gave renewable energy companies tax and duty exemptions, which spurred a great deal of private investment.<sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> </p><p>The success in Nicaragua may not be an easily replicated situation however. The movement was known as Energiewende and it is generally considered a failure for many reasons.<sup id="cite_ref-:0_13-0" class="reference"><a href="#cite_note-:0-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> A primary reason was that it was improperly timed and was proposed during a period in which their energy economy was under more competition. </p><p>Globally, the transition of electric utilities to renewables remains slow, hindered by concurrent continued investment in the expansion of fossil fuel capacity.<sup id="cite_ref-14" class="reference"><a href="#cite_note-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Nuclear_energy">Nuclear energy</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=6" title="Edit section: Nuclear energy"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Nuclear energy may be classified as a green source depending on the country. Although there used to be much more privatization in this energy sector, after the 2011 Fukushima district nuclear power plant disaster in Japan, there has been a move away from nuclear energy itself, especially for privately owned nuclear power plants.<sup class="noprint Inline-Template Template-Fact" style="white-space:nowrap;">[<i><a href="/wiki/Wikipedia:Citation_needed" title="Wikipedia:Citation needed"><span title="This claim needs references to reliable sources. (December 2020)">citation needed</span></a></i>]</sup> The criticism being that privatization of companies tend to have the companies themselves cutting corners and costs for profits which has proven to be disastrous in the worst-case scenarios. This placed a strain on many other countries as many foreign governments felt pressured to close nuclear power plants in response to public concerns.<sup id="cite_ref-:0_13-1" class="reference"><a href="#cite_note-:0-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> Nuclear energy however still holds a major part in many communities around the world. </p> <div class="mw-heading mw-heading2"><h2 id="Customer_expectations">Customer expectations</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=7" title="Edit section: Customer expectations"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Utilities have found that it isn't simple to meet the unique needs of individual customers, whether residential, corporate, industrial, government, military, or otherwise. Customers in the twenty-first century have new and urgent expectations that demand a transformation of the electric grid. They want a system that gives them new tools, better data to help manage energy usage, advanced protections against cyberattacks, and a system that minimizes outage times and quickens power restoration.<sup id="cite_ref-15" class="reference"><a href="#cite_note-15"><span class="cite-bracket">[</span>15<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="See_also">See also</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=8" title="Edit section: See also"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <ul><li><a href="/wiki/Consumer_Advocate_for_Customers_of_Public_Utilities" class="mw-redirect" title="Consumer Advocate for Customers of Public Utilities">Consumer Advocate for Customers of Public Utilities</a></li> <li><a href="/wiki/Electricity_transmission" class="mw-redirect" title="Electricity transmission">Electricity transmission</a></li> <li><a href="/wiki/Rate_Case" class="mw-redirect" title="Rate Case">Rate Case</a></li> <li><a href="/wiki/Rate_base_(energy)" class="mw-redirect" title="Rate base (energy)">Rate base (energy)</a></li></ul> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Electric_utility&action=edit&section=9" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1239543626">.mw-parser-output .reflist{margin-bottom:0.5em;list-style-type:decimal}@media screen{.mw-parser-output .reflist{font-size:90%}}.mw-parser-output .reflist .references{font-size:100%;margin-bottom:0;list-style-type:inherit}.mw-parser-output .reflist-columns-2{column-width:30em}.mw-parser-output .reflist-columns-3{column-width:25em}.mw-parser-output .reflist-columns{margin-top:0.3em}.mw-parser-output .reflist-columns ol{margin-top:0}.mw-parser-output .reflist-columns li{page-break-inside:avoid;break-inside:avoid-column}.mw-parser-output .reflist-upper-alpha{list-style-type:upper-alpha}.mw-parser-output .reflist-upper-roman{list-style-type:upper-roman}.mw-parser-output .reflist-lower-alpha{list-style-type:lower-alpha}.mw-parser-output .reflist-lower-greek{list-style-type:lower-greek}.mw-parser-output .reflist-lower-roman{list-style-type:lower-roman}</style><div class="reflist"> <div class="mw-references-wrap mw-references-columns"><ol class="references"> <li id="cite_note-1"><span class="mw-cite-backlink"><b><a href="#cite_ref-1">^</a></b></span> <span class="reference-text"><style data-mw-deduplicate="TemplateStyles:r1238218222">.mw-parser-output cite.citation{font-style:inherit;word-wrap:break-word}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .citation:target{background-color:rgba(0,127,255,0.133)}.mw-parser-output .id-lock-free.id-lock-free a{background:url("//upload.wikimedia.org/wikipedia/commons/6/65/Lock-green.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited.id-lock-limited a,.mw-parser-output .id-lock-registration.id-lock-registration a{background:url("//upload.wikimedia.org/wikipedia/commons/d/d6/Lock-gray-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription.id-lock-subscription a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output .cs1-maint{display:none;color:#085;margin-left:0.3em}.mw-parser-output .cs1-kern-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}@media screen{.mw-parser-output .cs1-format{font-size:95%}html.skin-theme-clientpref-night .mw-parser-output .cs1-maint{color:#18911f}}@media screen and (prefers-color-scheme:dark){html.skin-theme-clientpref-os .mw-parser-output .cs1-maint{color:#18911f}}</style><cite class="citation web cs1"><a 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