Are utilities a monopoly?
For example, the utility industry is a natural monopoly. The utility monopolies provide water, sewer services, electricity transmission, and energy distribution such as retail natural gas transmission to cities and towns across the country.
Why are utilities a monopoly?
Utilities do not operate in a normal free market system where prices and profits are determined by the willingness of consumers to pay. Instead, they are “regulated monopolies” in which public officials guarantee the companies a monetary return on their investments while also fixing prices for consumers.
What is the utility business model?
The utility business model—the method by which regulated utilities (e.g., electricity or natural gas utilities) recover their costs and can earn a return through rates charged to their customers—can impact whether a utility chooses to invest in successful energy efficiency programs.