Utilities Industry
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Utilities industry includes companies that offer services like electric power, steam supply, natural gas, and sewage removal.
Utilities industry is one of the rapidly evolving sectors. Earlier focus used to be on integration of ownership of functions like production, distribution, and customers. But companies in order to gain competitive advantage have started focusing on singular aspects of business. Regulators also have had a role to play in this.
Electric power industry in US
Electric industry in US has served as a regulated monopoly. In return customers have been assured of reliable energy supply. Investors are almost guaranteed of returns on their investment. But rising prices necessitated deregulation of this sector.
Deregulation has increased competition between utilities. Increased competition has led to increase in efficiencies. Prices are also being either held down or reduced in order to attract customers.
Sewage removal
Sewage removal sector includes services like collection, treatment, and disposal of waste. Removal of sewage is done through sewer systems and sewage treatment facilities.
Employment
As per US Bureau of Labor Statistics, utilities sector accounted for about 0.5 percent of total employment. Of all business establishments, utilities sector accounted for about 0.2 percent. Average annual employment with utilities sector has gone down from about 689,300 in 1994 to 580,800 in 2003.
Earnings
In 2003, average hourly earnings of utilities sector workers was estimated to be around $24.76 for non-supervisory positions. Average weekly hours in 2003 was around 41.1 in 2003.
Challenges
Utilities industry faces a lot of challenges. It has to address sustainability and climate change issues. Transparency is required at all levels to achieve sustainability. Climate changes have posed a difficult challenge to utilities industry where environmental, remediation, and health responsibilities have to be taken into consideration. For proper functioning of utilities sector, compliance with regulatory and reporting requirements is necessary. It will help in improving performance and increase operational efficiency. Other challenges faced by utilities industry include management of financial risk, consolidation, and securing supply.
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