General utilities otherwise known as service utilities and public utilities provide essential services to their ratepayers and organization members. Utility services are commonly limited to water, electricity, and natural gas or another heating fuel (such as propone or heating oil). These three primary services delineate their respective electric utilities, water utilities and gas utilities, which are ubiquitous across developed and modernized nations and regions.
General utilities operate with relatively large revenue streams due to their monopolized services under the utility or service district and deregulation that has encouraged growth and consolidation among private utilities. General utilities can be classified as public utilities (including electric co-ops, municipal utility districts [MUDs]) and private utilities (including investor-owned utilities [IOUs]). The general philosophy behind private and public utility business models are the respective merits of regulated enterprise as a means of ensuring affordable public services to ratepayers and deregulated or free market dynamics providing ratepayers with service at the lowest cost.
Deregulation with private company involvement in the utility industry has proceeded the farthest in most countries with energy utilities – or gas and electrical utility services. Water utility industry deregulation, with increasing private utilities, has proven controversial due to the vital nature of the service. Deregulation in electricity and natural gas utilities has diversified the industries and allowed generators and power producers (known as merchants) without transmission and distribution (T&D) infrastructure to sell power on grids. Natural gas and electricity is also more easily traded in deregulated markets, like those found in the US and Germany.