Utility regulation

Utility regulation exists to ensure that customers of utilities and other service providers using the utility system are protected from a lack of competition. To protect the public interest, regulation:

  • defines the services that regulated market participants can offer.
  • sets rates to be charged for those services.
  • prescribes accounting systems to track costs associated with them.
  • enforces safety standards.
  • approves construction of major new projects built by regulated entities.
  • monitors market behaviors of industry participants.


Regulation also is often used to foster desired public policy outcomes.

As the utility marketplace evolves, so do traditional concepts of regulation. This evolution has hardly been uniform. Some regions have moved forward with significant restructuring of regulatory-defined market structures while others have refused to venture beyond the traditional models. Thus an understanding of regulation at both the national and local levels as well as insight into how regulation is evolving is critical to success in a utility marketplace that can be both highly regulated and highly competitive.