A utility company provides electricity, gas, and water services to customers in a given area. They also maintain and repair power lines.
In deregulated markets, you can choose from a variety of energy suppliers to get a better deal on your electricity. You may be able to lock in your rate for a longer period, choose time-of-use pricing, or switch to clean, renewable energy sources.
Distribution of electricity
Electricity is generated by power plants and sent across long distances on high-voltage transmission lines to local facilities called substations. When the electricity reaches a substation, transformers reduce its voltage (called “stepping down”) to lower levels that can be delivered to homes and businesses.
A utility company is responsible for distributing this electricity to the consumers in the area. It also handles billing for the customers.
In some countries, the utility company is also responsible for metering. The metering process helps to track the amount of power used by the consumer and determines the total distribution fee charged.
In most countries, the local electricity grids are interconnected to form larger networks for reliability and commercial purposes. This makes it easier for the utility company to coordinate its efforts to provide reliable service to the customers.
Maintenance of power lines
The utility company is responsible for maintaining the power lines and equipment that carry electricity to homes and businesses. This includes repairing low hanging lines and ensuring that all equipment is in good working condition.
JEA’s crews also regularly patrol the power line routes to insure they are free from danger, hazards, trees, and other objects. This can be done from a vehicle or even by drone in hard-to-access areas.
Trees and limbs that come into contact with power lines can become energized and cause outages. To reduce this problem, JEA trims trees and limbs that are near its lines.
Maintaining a safe distance from power lines is critical to the safety of workers performing maintenance or repairs. To do so, workers should always wear personal protective equipment (PPE).
Collection of electricity bills
Electricity bills are issued by your utility company and list charges based on the amount of electricity you use. They also show your previous and current meter readings.
In addition to energy charges, your bill may also include fees that reflect your specific usage patterns and service. For example, you may be charged a Distribution Demand Charge, which is a fee for consuming more power than your meter can handle during peak periods.
Surcharges are another way your utility company can finance infrastructure projects. These charges are often approved by the state Board of Public Utilities, which has to approve them before they can be placed on your bill.
These rates are a small part of your electric bill, but they have an important impact on the future of our planet. That’s why environmental advocates are fighting them in court. They want to make sure they’re only used for legitimate infrastructure needs and not to fund political lobbying.
Investment in infrastructure
In addition to paying dividends, a utility company needs to invest in its infrastructure. This includes power plants, wires, poles, transformers and pipelines.
This investment is needed to keep the infrastructure running and to provide customers with reliable services. Often, the utility company uses debt to finance these investments.
These investments are also viewed by investors as being positive for the company’s earnings because the rate base declines as it depreciates, and capital grows as it is invested.
However, this investment is also a source of risk because the company must pay interest to its investors and face regulatory oversight.
The United States is facing a large range of infrastructure investment needs. Those needs include electric grid modernization, hardening and expansion to minimize the impact of weather-related events and cyber attacks, as well as water infrastructure improvements.