What Are Utilities Laws?

Utilities Laws are defined as essential commodities or services, such as water, electricity, transportation, or communication provided to the public by private business organizations. These organizations are regulated by local, state and federal governments.

Electrical Power

The generation, transmission, and distribution of electric power are heavily regulated. At the federal level, the transmission of electric power between utilities is governed by the Public Utilities Regulatory Policies Act (PURPA). Congress gave the Federal Energy Regulatory Commission (FERC) jurisdiction over energy transmission. PURPA requires that independent power producers (IPPs) be allowed to interconnect with the distribution and transmission grids of major electric utilities. In addition, PURPA protects IPPs from paying burdensome rates for purchasing backup power from major utilities, and sets the rate at which the utilities can purchase power from IPPs at the major utilities’ “avoided cost” of producing the power.

The principal regulation of the generation, distribution, and transmission of electric power happens at the state level through various state public utility commissions. Because the production of electric energy is connected with a public interest, states have a vested interest in supervising it and working to assure that electricity will be produced in a safe, efficient, and expedient manner. Electric utility companies must make available electricity at applicable lawful rates, and must file rate schedules with the public service commissions. Sometimes these rates are challenged, and administrative hearings are held to allow the utilities to petition for rate increases. Rates that would allow considerably more than a fair return may be struck down as unjustly high.

Electricity, particularly at high voltages or high currents, is a hazardous commodity. Faulty wiring, power lines that are close to trees and buildings, insufficient warning signs and fences around transformer stations, and over buried electrical cables can subject an individual to electric shock or electrocution. Because of the ultra-dangerous nature of providing electric power, states have many statutes and regulations in place to protect the public from these and other hazards.

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