Table 1. Major Characteristics of Electric Utilities by Type of Ownership

Ownership	Major Characteristics
Investor-Owned Utilities (IOUs) IOUs account for about three-quarters of all utility generation and capacity. There are 243 in the United States, and they operate in all States except Nebraska. They are also referred to as privately owned utilities.	Earn a return for investors; either distribute their profits to stockholders as dividends or reinvest the profits Are granted service monopolies in specified geographic areas Have obligation to serve and to provide reliable electric power Are regulated by State and Federal governments, which in turn approve rates that allow a fair rate of return on investment Most are operating companies that provide basic services for generation, transmission, and distribution
Federally Owned Utilities There are 10 Federally owned utilities in the United States, and they operate in all areas except the Northeast, the upper Midwest, and Hawaii.	Power not generated for profit Publicly owned utilities, cooperatives, and other nonprofit entities are given preference in purchasing from them Primarily producers and wholesalers Producing agencies for some are the U.S. Army Corps of Engineers, the U.S. Bureau of Reclamation, and the International Water and Boundary Commission Electricity generated by these agencies is marketed by Federal power marketing administrations in DOE (Bonneville Power Administration, Southeastern Power Administration, Southwestern Power Administration, and Western Area Power Administration) The Alaska Power Administration is in the process of being privatized under Public Law 104-58 enacted on November 28, 1995 The Tennessee Valley Authority is the largest producer of electricity in this category and markets at both wholesale and retail levels
Other Publicly Owned Utilities Other publicly owned utilities include: Municipals Public Power Districts State Authorities Irrigation Districts Other State Organizations There are 2,010 in the United States.	Are non-profit State and local government agencies Serve at cost; return excess funds to the consumers in the form of community contributions, and reduced rates Most municipals just distribute power, although some large ones produce and transmit electricity; they are financed from municipal treasuries and revenue bonds Public power districts and projects are concentrated in Nebraska, Washington, Oregon, Arizona, and California; voters in a public power district elect commissioners or directors to govern the district independent of any municipal government Irrigation districts may have still other forms of organization (e.g., in the Salt River Project Agricultural Improvement and Power District in Arizona, votes for the Board of Directors are apportioned according to the size of landholdings) State authorities such as the New York Power Authority and the South Carolina Public Service Authority
Cooperatively Owned Utilities There are 932 cooperatively owned utilities in the United States, and they operate in all States except Connecticut, Hawaii, Rhode Island, and the District of Columbia.	Owned by members (rural farmers and communities) Provide service mostly to members Incorporated under State law and directed by an elected board of directors which, in turn, selects a manager The Rural Utilities Service (formerly the Rural Electrification Administration) in the U.S. Department of Agriculture was established under the Rural Electrification Act of 1936 with the purpose of extending credit to cooperatives to provide electric service to small rural communities (usually fewer than 1,500 consumers) and farms where it was relatively expensive to provide service
Type	Major Characteristics
Cogenerators (QF)	Are qualified under PURPA by meeting certain ownership, operating, and efficiency criteria, established by FERC Sequentially produce electric energy and another form of energy, such as heat or steam, using the same fuel source Are guaranteed that utilities will purchase their output at a price based on the utility's avoided cost and will provide backup service at nondiscriminatory rates
Small Power Producers (QF)	Are qualified under PURPA by meeting certain ownership, operating, and efficiency criteria, established by FERC Use biomass, waste, renewable resources (water, wind, solar), or geothermal as a primary energy source Fossil fuels can be used but renewable resources must provide at least 75 percent of the total energy input Are guaranteed that utilities will purchase their output at a price based on the utility's avoided cost and will provide backup service at nondiscriminatory rates
Exempt Wholesale Generators (Non-QF)	Creation authorized by EPACT Are exempt from PUHCA's corporate and geographic restrictions Are wholesale producers; do not sell at retail Do not possess significant transmission facilities Utilities are not required to purchase their electricity Are regulated but usually may charge market-based rates
Cogenerators (Non-QF)	Are not qualified under PURPA Are nonutilities, utilizing a cogenerating technology, and may themselves consume part of the electricity they cogenerate
Independent Power Producers (IPP)	Generate and sell electric power at wholesale Usually authorized to sell at market-based rate
QF = Qualifying facility under PURPA (see footnote 6).

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