Regulating Electric Companies Which form of government regulation does this
passage primarily describe?
Electric power production and distribution is an industry
that is dominated by natural monopolies. Companies are
given a monopoly to operate in an area by local, county,
or state government, and in return, they have a legal
obligation to provide electricity on demand to all
customers in a geographic area. As a result, state and
federal agencies extensively regulate utility companies to
ensure customers and businesses are treated fairly.
At the state level, an elected or appointed commission
sets the rate of use for consumers, based upon the
request of the providers. By law, these rates must allow
the utility company to recover its cost of service, as well
as to make a profit on their investment.
O taking over a company to operate it
O placing price limitations on a producer
O requiring public ownership of an industry
O insisting on approval over decision making
Intro