ABSTRACT
This chapter provides background information on the composition, size, and institutional structure of the electric utility industry. It discusses impacts and issues associated with decentralized electricity production (DEP) technologies and their relationship to existing and anticipated industry circumstances. The issue that DEP might reduce the quality of electrical service provided by centralized power systems and their electrical grids has been raised before utility commissions in many states. The ownership classes of utilities differ in purpose, source of financing, level of integration, and regulatory oversight. Most investor-owned utilities are vertically integrated, with utilities generating, transmitting, and distributing power. The nation's transmission and distribution systems represent nearly 50 percent of total utility investment and are owned by investors, government held and cooperative utilities. Utilities are generally required by law to provide electricity to meet the demand changes. The electric utilities in the United States operate within a complex institutional setting characterized by diverse and frequently competing interest groups and regulatory agencies.
