Generally, an entity that provides a commodity or service that is considered vital to the general public, such as electricity or water. Utilities are typically given the exclusive right to provide a service to retail customers in a geographically defined area. As a result, they are generally heavily regulated at the state or federal level. There are two types of electric utilities:

While some electric utilities are vertically integrated and own generation, transmission, and distribution facilities, many only provide distribution service to retail customers. However, whether integrated or otherwise, utilities are often required to purchase additional electricity from other utilities, power marketers, or independent power producers to meet their customers' needs.