How Do Public Utilities Work?

A public utility is an entity that provides goods or services to the general public. Public utilities may include common carriers as well as corporations that provide electric, gas, water, heat, and television cable systems.

How do publicly owned utilities work?

Ownership structure

Cooperative utilities are owned by the customers they serve. ... Publicly owned utilities are non-profit. Private utilities, also called investor-owned utilities, are owned by investors, and operate for profit, often referred to as a rate of return.

How do public utilities make money?

Here's the basic idea behind this century-year-old utility business model: utilities make profit by investing in the infrastructure, like pipes and wires, that provide energy services to customers. ... In exchange, utilities are allowed to recover their costs, plus a profit.