Utilities provide electricity, natural gas, water, sewer and garbage pickup services. In most communities in the U.S., utilities function as monopolies. This situation arises because the cost of maintaining the required infrastructure can't easily be divided among different businesses in a service area. These infrastructure requirements make it necessary to have only a single utility company as a service provider for each geographic area.
If a utility is a monopoly, how can I be sure the pricing is fair?
Various government authorities regulate the services provided by public utilities. This practice restricts the profit-making potential of these companies, which should keep prices fair.
Do I have to use Utilities?
No one is required to use a particular utility. However, your options for receiving the services you require may be limited. For example, you may choose to get your electricity from a local electrical utility, or live without electricity, or install a generator or solar panels to create your own electricity. For most people, the only practical solution is to use the services of the local utility provider. For example, it may be too costly to dig a water well on your property. So, you may be required to use water through the local utility.
If Utilities are meant for public use, why do I have to pay for them directly instead of through taxes?
Utility bills are based on usage. If utilities were paid by other means, such as through a local sales tax or income tax, then the division of the cost would be disproportionate to individual usage. By billing users directly, each user pays based on his or her actual usage.