Career Plaining & Strategies (Part 1): Chapter 1 - Opportunities - Possible Test Questions - WEEK 11 Flashcards
Utility:
Traditionally, power delivery has been grouped with other public utility services such as water or natural gas, which are regulated by some form of government. Hence, the term “utility” is a commonly used designation for those companies who provide power delivery. Utilities were granted franchises, or rights, to serve certain areas. Under conditions of the franchise, utilities were required to serve any and all customers requesting service.
Investor-Owned Utilities:
- The first companies that evolved in the power delivery industry were private companies which were owned by stockholders and later became known as Investor-Owned Utilities (IOUs), a name that is still used today. They served only highly populated areas that were profitable, such as cities and suburbs, but did not provide service to the rural communities.
IOUs are similar to:
- corporations like McDonalds, Google, or Apple
About how many IOUs exist today?
- Approximately 100 IOUs exist today, and as in the past, they serve highly populated areas so they can generate a profit for their shareholders. Their stock is traded at public exchanges, such as the New York Stock Exchange.
Who can buy stocks from IOUs?
- Anyone can buy stock in IOUs and they are considered a safe and reliable long-term investment.
IOUs are private corporations, just like McDonalds, Google, or Apple. The only difference between these corporations is:
- their product, which is electricity (and many times gas too). Examples of IOUs are The Southern Company, Pacific Gas and Electric, Ameren, Idaho Power, ComEd, etc.
Municipalities
- It is not uncommon for cities to provide utility services, such as water, heat, and garbage. Some cities also provide power to their customers. In the power delivery industry, these city-owned power companies are referred to as Municipalities.
About how many municipalities exist today?
- Approximately 2,000 Municipalities exist today. The vast majority of municipal power companies are operated by small towns; however, some large cities also provide power.
A unique trait of municipalities is that:
- their service territories generally follow city limit boundaries. Examples of municipalities are Seattle City Light, Los Angeles Department of Water and Power, Long Island Power Authority, Austin Energy, Orlando Utilities Commission, etc.
Rural Electric Cooperatives:
- In the 1920s and 1930s, the nation was gripped by a severe economic depression. President Franklin Delano Roosevelt recognized that the United States could be more productive if all corners of the country had electricity, which could help in reversing the crippling effects of the Great Depression. At that time, power was only available in populated areas, delivered mainly by IOUs.
- Their service territories are most commonly in rural areas and the size of the territory can vary significantly from one cooperative to the next.
Roosevelt passed the Rural Electrification Act which provided:
- low-interest federal government loans for the construction of power systems in rural areas. Citizens in rural areas would be allowed to form power companies that would serve its citizens, hence the term “cooperative.” Boards of elected officials, who live within the service territories of the cooperative, govern the not-for-profit REC’s.
About how many Rural Electrical Cooperatives exist today?
There are approximately 1000 Rural Electrical Cooperatives in the United States and many other countries are using the cooperative model to establish utility service in their rural areas.
Examples of Rural Electrical Cooperatives:
- Raft River Rural Electric
- Cobb Electric Membership Corporation
- Ravali County Electric Cooperative
Public Utility Districs (PUDs) and Public Power Districs (PPDs) are similar to:
- Cooperatives.
Public Utility Districts (PUD) and Public Power Districts (PPD) are established and recognized by:
- individual states.
Public Utility Districts (PUD) and Public Power Districts (PPD) exist to provide:
- service (largely to rural communities), and their rates are set by the boards of officials to cover their expenses and not to provide any profit. The utilities are owned by the customers that are served and not by stockholders.
Generation and Transmission (GT) Companies:
- There are a variety of organizations across the US that provide bulk generation and transmission (G&T) services. Imagine an electrical cooperative in the middle of the US–where does it get its power from? Most all of these organizations serve smaller power companies, such as municipalities, cooperatives, PUD’s and PPD’s. G&Ts provide bulk power with transmission systems and have limited distribution lines.
Power Marketing Administrations:
- There are only four Power Marketing Administrations (PMAs) in the U.S.
- Bonneville Power Administration
- Southeastern Power Administration
- Southwestern Power Administration
- Western Area Power Administration.
- PMAs are governed by the US Department of Energy.
PUD, PPD, and Cooperative G&Ts:
- Public power companies, such as PUDs, PPDs, and Cooperatives sometimes collectively form Generation and Transmission Companies to provide bulk power to themselves. If the G&T is formed by a group of Cooperatives, the G&T is also formed as an electrical cooperative. The customers served by the G&T Cooperative are then the Rural Electrical Cooperatives that established it. Similarly, if the G&T is formed by a group of Public Power Districts, the G&T is formed as a Public Power District.
Irrigation Districts (IDs):
Another form of public power companies are Irrigation Districts (IDs). Because water is commonly used to generate power, it is then logical for Irrigation Districts to install power systems to deliver power to their customers.
Irrigation Districts are most common in:
- the arid regions of the United States where farmers rely on irrigated water to grow their crops. It is important to mention that not all Irrigation Districts provide power-some focus solely on water. Examples of IDs providing water and power include Turlock Irrigation District, Modesto Irrigation District, Imperial Irrigation District, etc.
Line Contractors:
- Line contractors are most commonly used when the power company has more work than their line crews can handle, or when a particular project is beyond the capability of the power company. Many construction and maintenance projects require specialized equipment and personnel, for which line contractors are well suited.
Although there are still many independent line contractors, most of the major line contractors are owned by one of two major holding companies:
- The MYR Group
- Quanta Services
Major line contractors held by The MYR Group include:
- Hawkeye Construction
- Great Southwestern Construction
- Sturgeon Electric
- Harlan Electric
- L.E. Myers